Israel tonight denied firing a missile onto a beach in Gaza last Friday that killed seven Palestinian civilians and caused the militant group Hamas to call off its ceasefire.

Major General Meir Califi, who headed the Israeli army’s investigation into Friday’s incident, said Israel’s shelling of Gaza had stopped by the time the beach explosion occurred.

"The chances that artillery fire hit that area at that time are nil," Califi told a news conference.

The denial came amid continued tit-for-tat firing from either side of the border. A double Israeli helicopter strike today killed eleven people, including two children. Some of the dead were medical workers hit by the second missile after they rushed to help the victims of the first.

Two of the Palestinian dead in today's attack were confirmed as members of the hardline Islamic Jihad movement, which the other nine were believed to be civilians. They included two young brothers, aged four and eight, and their father.

An Israeli military statement said that today's air strike was aimed at terrorists on their way to launching long-range Katyuasha rockets against Jewish settlements. The statement said that 38 rockets had been fired at Israel in the last 24 hours, and more than 100 since last Friday.

Friday's explosion on the beach wiped out all but one member of a Palestinian family on a beach on Friday, and has made Huda Ghalia, the 11-year-old survivor of the explosion, the latest icon of Palestinian suffering

Amir Peretz, the Israeli Defence Minister, said this mornign that Israel had suspended air strikes after the killings on Friday, but that that restraint was now at an end.

"We will act with all our might and use all our means against any group that acts against us," said Mr Peretz. "We showed the necessary restraint in light... of the international uproar that resulted, but it’s over."

Tonight Mr Peretz stated categorically that the explosion was not caused by the Israeli Defence Forces but did not provide an explanation for what might have caused the blast. Israeli ministers had already suggested that the deaths might have been caused by a Palestinian mine.

An investigator from international rights group Human Rights Watch told reporters in Gaza earlier that evidence pointed to Israel having fired the shell, but he had to leave the door open to the possibility that the explosion was caused by something else.

Around 30 people were injured in today's bombing. A spokesman for the militant group, Islamic Jihad, said that three of its members were travelling in a vehicle hit by a missile and that two, including its chief rocket launcher, were killed.

Witnesses said that most of the civilian casualties occurred when an Israeli helicopter launched a second missile after a crowd had gathered. Mahmoud Abbas, the Palestinian President, condemned the attack, one of the heaviest in recent years, as "state terrorism".

Gaza’s Shifa hospital was overwhelmed by the arriving wounded, some of whom were treated on the floor. At the hospital’s morgue, where the bodies of the dead children lay, angry women shouted, "Death to Israel, Death to the occupation!"

Outside, Kader Abib, an Islamic Jihad leader in Gaza, told protesters: "What happened today is a brutal massacre committed against innocent civilians and fighters from our group... The Zionist enemy insists on shedding Palestinian blood and we insist on going ahead with our Jihad and resistance. God willing the resistance groups... will have a harsh response. All options are open for us."

Today's cross-border violence followed a night of vicious infighting between members of Mr Abbas's Fatah faction and the Hamas-led Palestinian Government, which led to the resignation of one of the only independent members of the cabinet, Judeh Mourqos, the Tourism Minister.

Offices belonging to the Palestinian parliament and cabinet were set on fire and fire engines were prevented from reaching the scene by gunmen from the Al-Aqsa Martyrs Brigades and even police officers.

An MP was kidnapped and clashes between security services loyal to the two factions erupted again, killing two people in Rafah, where Hamas militants fired rocket propelled grenades at a Fatah-dominated security building.

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