At least two Hamas militants were killed and two others wounded in an Israeli missile strike in he Gaza Strip, Palestinian medical workers and the Islamist group said.

Residents said the group had been firing mortars at Israel.

An Israeli army spokeswoman said the air strike was on militants about to fire mortars into Israel. Israel considers Gaza an enemy entity and has stepped up attacks in the past week to try to curb rocket fire into Israel.

Israel's Army Chief of Staff Gabi Ashkenazi reiterated Israel did not rule out a broad incursion into Gaza to stop the salvoes. "If necessary, we are ready for the possibility of an operation (in Gaza). Until then, we must use all other methods, and act every day and night, in order to provide security,"

Ashkenazi, who rarely speaks to the media, told Army Radio.

Earlier this week Israeli Defense Minister Ehud Barak said he had authorised more military action in Gaza, including against manned military Hamas targets.

The army said more than 2,000 mortars and rockets had been fired into Israel in 2007.

Hamas, the Islamist group that seized Gaza in June, said 22 of its militants had been killed in Israeli attacks since Israel and the Palestinians launched formal peace talks last week.