At least two Palestinian children and a woman have been killed by Israeli fire in western Gaza City, Palestinian medics say.
Unconfirmed local reports say that an Israel-backed Palestinian militia carried out a raid and that the Israeli military carried out shelling and air strikes after it was discovered.
A third child was killed in a separate incident in central Gaza.
Israeli Defence Minister Israel Katz said that a senior Hamas official had been arrested, but it was not clear whether the announcement was related to the incident in Gaza City.
Videos from Gaza City captured chaotic scenes, with the sound of gunfire and the aftermath of air strikes.
Initial Palestinian reports said that a special Israeli unit infiltrated a crowded area using a van and motorcycles.
It is not clear whether those involved were Israeli forces or members of an Israel-backed Palestinian militia.
A local source told the BBC that a senior Hamas security official was believed to have been targeted.
The Israeli military reportedly carried out drone strikes to try to secure the special unit after its presence was uncovered.
The military has only confirmed striking several targets in Gaza “in order to remove threats to the security forces”, adding that there were no injuries to its troops.
