The gun battles between Israeli troops and Palestinian militants turned one Gaza neighborhood into a war zone. As paramedics tended to the wounded, militants scrambled through the streets hoisting rocket launchers. A group of boys took cover behind a tin shack as gunfire crackled down a street.
Haaretz newspaper reported one of the dead was an 11-year-old boy.
At least five of the dead were armed men, including four from the Islamic Jihad group and one from Hamas, and three were believed to be bystanders, hospital officials said. Confusion in identifying victims led hospital officials to report initially that nine had been killed; they later revised the toll to eight.
Also Wednesday, an Israeli forensics team flew to Germany in last-minute preparations for a prisoner swap with the Lebanese guerrilla group Hezbollah, while a few dozen Arab prisoners held in Israel were packing their bags ahead of their release.
Under the German-mediated swap, expected Thursday, Israel is releasing a total of 436 prisoners in exchange for businessman Elhanan Tannenbaum and three soldiers who are presumed dead. Most of the prisoners are Palestinians, but more than 30 are from other countries and will be handed over in Germany.
However, a group called The Victims Of Arab Terror filed a petition with Israel's Supreme Court Wednesday seeking to block the prisoner exchange. "Hundreds of dangerous terrorists, including ones with blood on their hands," must not be released, attorney Baruch Ben-Yossef said.
Wednesday's firefight erupted near the Jewish settlement of Netzarim, in the heart of the teeming Gaza Strip.
The army said militants fired anti-tank missiles and set off a bomb, prompting the troops to fire back. Two Palestinians were killed in the incident, said Dr. Moawia Hassanain, a Palestinian hospital official.
Later, the army entered a Gaza City neighborhood near Netzarim, and a fierce battle flared between troops and gunmen. Six other Palestinians were killed, and several were wounded, Dr. Hassanain said. The military said no Israeli soldiers were wounded.
As two Israeli tanks rumbled slowly along one road, a rocket-propelled grenade whizzed just a few yards (meters) in front of the two vehicles, leaving a streak of white smoke. The tanks swiveled their barrels and fired machine guns.
The fighting came as U.S. envoys John Wolf and David Satterfield met with Palestinian Prime Minister Ahmed Qureia. The envoys, who were to meet Israeli officials as well, are trying to revive stalled peace negotiations.
Qureia said the American officials also demanded that he soon meet with Israeli Prime Minister Ariel Sharon. Qureia has balked at a summit with the Israeli leader until he gets assurances that it will produce results.
"We told them, 'OK, help in the preparation for the meeting,'" Qureia told reporters. "We are not against it. If there is a successful meeting, a meeting with good indications for our people, we are ready."
The meetings came a day after Egyptian Foreign Minister Ahmed Maher met Yasser Arafat and other Palestinian leaders. Egypt has been trying to persuade militant groups to halt attacks on Israelis.
Israel's chief pathologist and a slew of medics and rabbis arrived in Germany on board an Israeli Air Force plane, Israeli security sources said. The team planned to examine dental records and other evidence to verify that Hezbollah is handing over the soldiers' bodies, the sources said, speaking on condition of anonymity.
Meanwhile, 23 Lebanese prisoners, including top-ranking guerrilla leaders Mustafa Dirani and Sheik Abdel Karim Obeid, and a few prisoners from other Arab countries were packing their bags and donating their electrical appliances to other inmates before leaving. One German man accused of supporting Hezbollah is also included in the deal.
"The prisoners who are flying abroad are already planning the day after ... They are talking to each other about their release," Prison Authorities spokesman Ofer Lefler said.
Later Wednesday, 130 Israeli soldiers were to secure three buses that will take the prisoners to Ben Gurion International Airport near Tel Aviv, Lefler said.
Just after the exchange in Germany, Israel also will release 400 Palestinian prisoners in the West Bank and Gaza Strip and hand over the bodies of 59 Lebanese militants at the border with Lebanon, security sources said.
In Berlin, Chancellor Gerhard Schroeder's spokesman, Bela Anda, declined to discuss details of the exchange. However, he said Germany "is thankful to be able to contribute to humanitarian progress here, to the extent that it is possible."
After the swap is completed, the sides will launch a second stage of negotiations. In that stage, Israel is supposed to receive within three months concrete information about the fate of Israeli airman Ron Arad, who was shot down over Lebanon in 1986 and captured alive.
In exchange, Israel would then release Samir Kantar, a Lebanese militant who has been in an Israeli prison since 1979 for killing three Israelis.