Israelis and Palestinians have fought their worst clash in a year as Israel said it would not stop building in East Jerusalem that is blocking peace talks.
Israeli tanks advanced into the Gaza Strip after the firecest clash with Palestinian fighters in 14 months killed at least two men on either side on the borders of the enclave.
Resisting United States pressure after a meeting with President Barack Obama in Washington this week, Prime Minister Benjamin Netanyahu said Israel would not stop building in East Jerusalem, although he vowed to find a way to relaunch stalled negotiations.
"Israeli construction policy in Jerusalem has remained the same for 42 years and isn't changing," said a written statement from Netanyahu's spokesman, Nir Hefez.
The impasse has triggered sporadic rocket attacks this month from the Gaza Strip, which Israel answered with airstrikes. But Friday's close-range firefight was the deadliest since Israel's all-out assault on the Islamist group in early 2009.
The Israeli army said an officer and a conscript were killed when Palestinian gunmen fired on a military patrol inside the Gaza Stip. Two soldiers were wounded and two Palestinian fighters also died in that clash, it said.
Palestinian officials did not immediately confirm the two deaths but said at least five Palestinians, one a ten-year-old boy, were wounded, and one man of 23 died later of wounds, according to Gaza hospital officials.