Israel army clashes with militants in southern Gaza

GAZA, July 1 (Reuters) Israeli troops and Hamas gunmen clashed inside southern Gaza today in one of the worst exchanges of fire since Israeli forces launched an assault to free a soldier abducted by Palestinian militants.

Gunmen from the armed wing of the ruling Hamas movement said they hit an Israeli tank with two rocket-propelled grenades near the town of Khan Younis.

An Israeli military source said one RPG was fired at an army bulldozer, adding the clash was still taking place and that there were no immediate reports of casualties.

Soldiers backed by tanks had earlier skirmished with gunmen in the area, wounding one Palestinian, witnesses had said. An Israeli military source had said the soldiers were looking for mines and other explosives.

Israeli forces entered the southern Gaza Strip this week as part of efforts to free Corporal Gilad Shalit, who was seized in a cross-border raid last Sunday.

REUTERS SHB KP1920