The Israeli army has begun a ground offensive in southern Gaza, following the capture of an Israeli soldier by Palestinian militants.
Israeli aircraft earlier bombed bridges and a power plant in the Gaza Strip.
Cpl Gilad Shalit was abducted by Palestinian militants during a raid on an Israeli post near Gaza on Sunday.
Israel had warned of a massive military assault if he was not freed and its tanks have been massing along the border with Gaza for several days.
It is unclear how many troops are being used in the incursion, launched from the Kerem Shalom crossing near southern Gaza.
A spokeswoman for the Israeli armed forces said they had not encountered any resistance from the Palestinians.
The Israeli forces are reported to have taken up positions near the town of Rafah, shortly after passing Gaza's disused international airport.
The Associated Press news agency quotes Palestinian witnesses as saying the soldiers were moving under the cover of tank shells.
Palestinian militants anticipating an Israeli assault have been erecting barricades and preparing hideouts and ambush positions.
Israeli military officials have been quoted as saying Prime Minister Ehud Olmert had backed a "limited operation" targeting the "terrorist infrastructure".
http://news.bbc.co.uk/2/hi/middle_east/5123262.stm