The salvo, which moderately wounded one man, came a day after a rocket attack killed two Israelis, including a 3-year-old boy, in the border town of Sderot.
The pre-dawn Israeli military operation came in response to the Sderot attack, the first time in nearly four years of fighting that the crude homemade Qassam rockets killed Israelis.
Under the cover of intense machine gun fire, Israeli tanks and bulldozers blocked roads in the northern Gaza Strip early Tuesday — the start of what security officials said could be an extended operation in the area.
One Palestinian militant was killed and five were wounded, Palestinian security officials said.
"After this takeover, the ability to launch Qassams will be diminished," Defense Minister Shaul Mofaz said during a tour of an army base in northern Israel.
"We will carry out further operations to damage the infrastructure for manufacturing the rockets," he added. His comments were reported on the Web site of the Haaretz daily.
Despite the upsurge in violence, Prime Minister Ariel Sharon said Monday that he remains determined to withdraw from Gaza in 2005 and pledged to speed up the evacuation of Israeli settlers who are ready to leave voluntarily.
Sharon's vice premier, Ehud Olmert, said Israel will continue to strike at militants even as plans for the withdrawal proceed. "There is a war against terror, and we shall continue fighting terror regardless of disengagement," he said.
Broad public support in Israel for Sharon's withdrawal plan could be weakened by continued rocketing from Gaza.
The Israeli operation Tuesday was focused around the town of Beit Hanoun in northern Gaza.
By midmorning, the army had sealed all entrances to the town. A bulldozer moved piles of sand near one of the exits, and an Apache helicopter hovered overhead.
Israeli helicopters fired missiles at a Hamas-linked media center in a 16-story building in Gaza City and a metal workshop in a refugee camp early Tuesday. The army said rockets were being made at the workshop.
The army also blew up an empty eight-story building and razed 15 homes near the outpost. The demolitions left about 60 Palestinians homeless.
Beit Hanoun has been repeatedly targeted in army raids in the past. The town is less than one mile from Sderot, and militants have repeatedly launched missiles from the area.
In previous raids, the army demolished scores of homes and uprooted thousands of trees, saying it was trying to deprive cover for those firing rockets.
Residents said at the time the destruction, which turned large areas into wasteland, was wanton.
"I oppose those who are firing rockets, and I don't like violence at all," said Jaber Saeda, a 42-year-old farmer who said his greenhouses had been destroyed by Israel last year.
"But how can I convince my children and myself that the Israelis are serious about peace when I see them uprooting trees and destroying houses and killing our children? They have left no space for trust between us and them," he said.
Israeli security officials, speaking on condition of anonymity, said troops would likely stay in northern Gaza for an extended period.
Despite the crackdown, militants managed to fire two more Qassam rockets into southern Israel early Tuesday. The militant group Hamas claimed responsibility for the attacks.
The army said one rocket fell in Sderot, moderately injuring one person at a packing plant. A second rocket fell in a field.
Israeli army helicopters operating nearby responded with heavy machine gun fire in Gaza.
Over the weekend, Palestinian militants dug a 1,000-foot tunnel and detonated hundreds of pounds of explosives underneath an army outpost, killing a soldier and wounding five others.
Hamas claimed responsibility for both attacks, and the Al Aqsa Martyrs' Brigades said it participated in blowing up the outpost.
Some Israeli analysts compared the tense situation to the uncertainty along Israel's northern border prior to the withdrawal from south Lebanon in 2000.
The pullout from an Israeli-occupied "security zone" was prompted by great pressure among a public weary of rocket attacks on border communities and the ongoing killing of soldiers in Lebanon.
Sharon's "unilateral disengagement" plan calls for the evacuation of all Gaza Strip settlements — where some 7,500 Israelis live among 1.3 million Palestinians — and four West Bank enclaves by September 2005.
Sharon has said his plan will improve Israel's security by reducing friction with the Palestinians. But more violence is expected ahead of the pullout, to be completed by the end of 2005.
In the West Bank, meanwhile, an Israeli man was found shot dead in his truck on Tuesday. Al Aqsa Martyrs' Brigades took responsibility for the killing, saying it was to avenge Israel's killing of its leader last weekend.
The newly successful rocket attacks, and the daring plot to tunnel under and blow up an Israeli outpost, represent innovations in militant's strategies that could reduce Israel's vast military superiority. In a similar development, militants were able to blow up an Israeli tank in March, killing some crewmembers.