Israeli troops swooped on a Jewish outpost in the West Bank and dismantled an unauthorised synagogue yesterday, sparking scuffles with settlers and the arrest of 20, witnesses said.

In the Gaza Strip, Israeli forces raided the Rafah refugee camp and wounded three Palestinians with a tank shell before armoured bulldozers demolished 15 houses, sending residents fleeing, witnesses said.

Meanwhile Israeli warplanes struck two Hizbollah bases in Lebanon yesterday in retaliation for a border attack by the Lebanese guerilla group that killed an Israeli soldier a day earlier.

Israel held Syria, the main powerbroker in Lebanon, responsible for Monday's incident, but an Israeli security source said the military response was limited to Hizbollah targets to avoid stoking tensions with Damascus.

"There have been two air strikes," a Lebanese army source said, adding that no casualties were reported.

Israel has pledged to scrap settlement outposts on occupied territory in keeping with a US-backed plan for peace with Palestinians. But the soldiers' target was just the crude wooden synagogue, not the entire West Tapuach outpost, settlers said.

Troops had been ordered to take down the structure built by followers of slain ultra-nationalist Rabbi Meir Kahane at the outpost, close to the established larger settlement of Tapuach, after settlers lost a Supreme Court appeal.