Despite the invasion, defiant militants kept up their barrages Wednesday. Two homemade rockets, painted in camouflage patterns of green, were filmed shooting off their simple launchers in a plume of while smoke, streaking toward Israel. They were among eight rockets fired during the day.

The takeover of Beit Hanoun is expected to last only a few days and does not signal the start of a wider-scale military offensive in Gaza, Israeli officials said. One plan for such a major operation would involve seizing large portions of southern Gaza for an extended period to destroy weapons-smuggling tunnels from Egypt.

Israel has several reasons not to launch such an offensive at the moment.

Israeli Prime Minister Ehud Olmert is to meet U.S. President George W. Bush later this month, and likely would not want a major escalation in Gaza to overshadow the trip.

A wider offensive could also harm negotiations for the release of Israeli soldier Gilad Shalit, who was kidnapped in June by Hamas-allied militants, and hinder attempts by moderate Palestinian President Mahmoud Abbas to form a new Palestinian government acceptable to the West.

An escalation could also hinder U.S. efforts to improve security and cut down on smuggling at the Egypt-Gaza border.

U.S. National Intelligence Director John Negroponte met Wednesday with his Egyptian counterpart, Omar Suleiman. Arab diplomats said Negroponte proposed Egypt allow a U.S.-led team of multinational peace monitors to help police the border with Gaza.

He also proposed that CIA counterterrorism experts assist in efforts to halt cross-border smuggling, said the diplomats, who insisted on anonymity because of the sensitivity of the matter.

The takeover of Beit Hanoun was the latest in a series of Israeli incursions into Gaza, first launched after the capture of Shalit. Such raids are aimed both at pressuring Hamas to release the soldier and at trying to halt rocket attacks.

By nightfall Wednesday, Israeli troops were in control of most of Beit Hanoun, a town of 50,000, enforcing a curfew in some areas and patrolling the streets with tanks. Attack helicopters fired machine guns and missiles at groups of militants. Israeli snipers took up rooftop positions, and troops set up a makeshift base near a local agricultural school. Bulldozers flattened some farming areas, residents said.

Throughout the day, Palestinian gunmen exchanged fire with the Israeli forces.

Eight Palestinians were killed, including five militants and a policeman, and at least 61 people were wounded, four critically, hospital officials said. Most of the wounded were gunmen, but they also included a woman and an 11-year-old boy, doctors said.

An Israeli soldier was also killed.

Capt. Avital Leibovitz, a military spokeswoman, said Beit Hanoun was targeted because 300 rockets had been fired from the town since the beginning of the year, out of a total of 800 launched from Gaza.

Israel’s Security Cabinet, a group of senior ministers, on Wednesday rejected proposals for a major escalation against rocket squads and arms smuggling operations along the Egypt-Gaza border.

"We have no intention of being dragged into any operation," said Defense Minister Amir Peretz, adding the army would stick to pinpoint raids with defined goals and would not conduct what he called "showcase operations."

Col. Nir Press, head of the Israeli army liaison unit, said efforts were being made to ease humanitarian problems caused by the invasion. He said movement of ambulances was being coordinated with Palestinian and international aid groups, and cargo passages into and out of Gaza remained open.

Abbas condemned the Israeli operation in Beit Hanoun and urged the international community to take action to halt it.

Government spokesman Ghazi Hamad of Hamas accused Israel of deliberately keeping Gaza mired in chaos to give itself "a green light in order to continue aggression against our people."