JEBALIYA REFUGEE CAMP, Gaza Strip – Israeli troops struck deep inside the largest Palestinian Arab refugee camp yesterday, battling masked gunmen in an unprecedented campaign to stop deadly rocket fire on Israeli towns. Twenty-eight Palestinian Arabs were killed and 131 wounded, the bloodiest single-day toll in fighting in 30 months.

Three Israelis – two soldiers and an Israeli woman jogger – were killed in two Palestinian Arab shooting attacks in northern Gaza.

Prime Minister Sharon approved a large-scale military operation in the northern Gaza Strip after meeting with advisers late yesterday, an Israeli official said. The plan was a response to the killing of two Israeli children, ages 2 and 4, by a Hamas rocket attack on an Israeli border town Wednesday. However, he stopped short of ordering a call up of reserves. The plan, which has the backing of the defense minister, Shaul Mofaz, was unanimously approved by the Israeli security Cabinet last night.

The approval clears the way for Israeli troops to move in force into the Palestinian Arab towns of Beit Lahiya, Beit Hanoun, and the sprawling Jebaliya refugee camp, an official said, speaking on condition of anonymity.

The army’s push yesterday into the center of Jebaliya – a first in four years of fighting – signaled a change in military tactics. Since fighting erupted in 2000, the military has refrained from reoccupying large areas of crowded Gaza for long periods, for fear of getting bogged down in urban combat.

Armored vehicles rolled into Jebaliya, a terrorist stronghold with 106,000 residents, yesterday morning. Throughout the day, masked Palestinian Arabs taking cover in camp alleys fired assault rifles – and occasionally antitank missiles and grenades – at tanks, which responded with machine-guns. Terrorists were seen laying explosive charges and unraveling detonation wire.

In the bloodiest incident, a tank fired a shell toward a group of gunmen, killing seven Palestinian Arabs and seriously wounding 23, including gunmen and civilians.