The 12-story buildings were destroyed in retaliation for an attack early Friday in which two Palestinian gunmen infiltrated an army outpost in the Jewish settlement of Netzarim and killed three soldiers, including two women. Israel said the buildings were used to plan Friday's attack.
The buildings were located on a sandy hill overlooking the heavily guarded settlement. The explosion rocked the area for miles around and sent plumes of black smoke and debris into the air, causing damage to many nearby Palestinian homes.
Meanwhile, the Palestinian militant group Hamas said it would meet in the near future with Prime Minister Ahmed Qureia. The prime minister, who took office earlier this month, has been trying to arrange a deal to halt three years of Israel-Palestinian fighting.
Ismail Haniya, the Hamas spokesman in the Gaza Strip, said Qureia had invited Hamas for talks. "The Hamas movement has no reason to boycott such a meeting and Hamas is preparing for this meeting," Haniya said. No date was set.
Qureia's office could not confirm the invitation had been issued but reiterated the Palestinian Authority's interest in gaining Hamas's agreement for a cease-fire. Hamas has claimed responsibility for numerous attacks on Israeli targets, including participation in Friday's raid.
In one of Sunday's clashes, a Palestinian, armed with a rifle and hand grenades, approached an army outpost guarding a Jewish settlement bloc, the military said. An army guard saw the gunman and alerted a nearby force. A fierce gunbattle erupted and the Palestinian was killed, the military said.
In a separate incident a few miles away, troops noticed a group of four Palestinians crawling toward an army outpost, the military said. Troops fired on the group and hit two. Two others fled, the military said. The conditions of the Palestinians weren't immediately known.
Also Sunday, a homemade Palestinian rocket fired from the Gaza Strip landed near the southern Israeli town of Sderot, the 13th such rocket to fall in Israeli territory in the past week. No injuries or damage were reported. Stopping the rocket attacks is cited by the army as a major reason for its stepped-up activities in Gaza.
Before dynamiting the three apartment buildings, Israeli troops blew up a Palestinian police post where the military said one of Friday's attackers had fled. The gunman received shelter and assistance from Palestinian police, the army said.
Shortly afterward, troops set off explosives in and around the three tall buildings, which belong to Palestinian Preventive Security, the main Palestinian force in Gaza.
"The terrorists who carried out the attack on Netzarim last week used the buildings for several weeks and collected prior intelligence for the attack," Brig. Gen. Gadi Shamni, commander of the Gaza division, told Israel Radio.
Before the huge blasts rocked the area, Israeli soldiers ordered about 2,000 residents of nearby buildings in southern Gaza City out of their homes.
Maj. Sharon Feingold, an Israeli military spokeswoman, said the 2,000 residents were temporarily evacuated "for their own safety." Later, the residents returned to their homes.
When they came back, they found considerable damage, said Moreed Naim, 29, an off-duty Palestinian firefighter who lives in the neighborhood. "All the windows were broken, some of the furniture was damaged, and my car was destroyed," he said.
Residents said soldiers fired rifles and machine guns, wounding two people and pock-marking walls.
As Palestinians left their homes, the settlers at Netzarim moved into bomb shelters for protection, the military said.
Meanwhile, two Palestinians died this weekend of wounds suffered earlier this week, including a Palestinian wounded in an Israeli missile strike last Monday in the Nusseirat refugee camp died, bringing the number killed to nine.
Palestinian hospital sources also said 18-year-old Akram Bakroun, who was wounded Wednesday by an Israeli tank near the eastern border of the Gaza Strip, died Sunday.
Israeli peace activists blamed Israel Prime Minister Ariel Sharon for the bloodshed and for stalling peace efforts.
About 4,000 Peace Now demonstrators gathered in front of Sharon's residence Saturday night in Jerusalem, chanting "Sharon, Go Home" and carrying torches. "Sharon: Terminator of Israel" one banner read, an expression of the crowd's anger at the prime minister's frequent crackdowns on Palestinians in the West Bank and Gaza Strip.
"The economy is in a grave decline. There is no security. Civilians and soldiers are killed everyday," said Ran Cohen, a legislator from the dovish Meretz party.