Israel bombs Gaza weapons factory, border tunnel

GAZA, July 29 (Reuters) Israeli forces entered the northern Gaza Strip today after an aircraft bombed a suspected weapons factory and border tunnel.

No casualties were reported in the early morning air strikes, part of Israel's month-long assault on Gaza to recover a captured soldier and end cross-border rocket attacks.

At least 150 Palestinians, around half of them gunmen, have been killed in the offensive.

Israeli tanks and armoured vehicles entered the Erez industrial zone in north Gaza on Saturday near the town of Beit Lahiya, Palestinian security sources and witnesses said.

''The forces are there looking for tunnels and explosives. It is not a big operation,'' said an army spokeswoman.

Palestinian security sources said the Erez incursion could be a prelude to a raid on Beit Lahiya.

The army said one of its targets overnight was a factory in Gaza City used by the Islamic militant group Hamas, which controls the Palestinian government, to manufacture and store arms.

The army said it also bombed a tunnel along the Israeli-Egyptian border near Rafah.

Israel has rejected demands for a prisoner exchange by the gunmen who captured Corporal Gilad Shalit by tunnelling under the border on June 25. Some of the gunmen came from Hamas.

REUTERS LL PC1601