Israeli soldiers were ploughing up the ground on Thursday and destroying tunnels allegedly used to smuggle arms from Egypt in their deepest incursion into the Gaza Strip for more than a year.
Hundreds of troops were operating up to four kilometres (2.5 miles) inside Palestinian territory to the outskirts of the southern border town of Rafah, in an offensive the army said had so far uncovered nine tunnels.
"We are going to continue our searches for as long as necessary," a military spokesman said about the tunnels, which Israel says are dug by militants in order to smuggle weapons across the border from Egypt.
Another spokeswoman confirmed that the operation, which follows many other anti-tunnel offensives, was the deepest inside the Palestinian territory since Israel withdrew all its troops and settlers from the Gaza Strip in 2005.
On the diplomatic front, an Israeli cabinet minister complained to Egyptian President Hosni Mubarak that weapons, including anti-tank missiles, were being smuggled in large quantities through tunnels and by sea into the Gaza Strip.
"I told president Mubarak that the arms smuggling via the tunnels and by sea is continuing in large quantities," Infrastructure Minister Benjamin Ben Eliezer told public radio after his talks with the Egyptian president.
Officials have repeatedly expressed concern about high-grade weapons being smuggled into the Gaza Strip, and have called on Egypt to take more effective action on its side of the border to clamp down on contraband.
Israel has also repeatedly vowed to step up a four-month operation in Gaza that began after militants captured an Israeli soldier in June, vowing not to allow it to become "a second Lebanon," meaning harbouring well-armed militants.
More than 250 Palestinians have been killed in the territory by Israeli fire since June 28, three days after militants, including gunmen from the ruling Islamist movement Hamas, staged their daring cross-border raid.
The country's private Channel 10 television reported that two battalions, or around 1,000 Israeli soldiers, were now taking part in the latest operation.
Two Palestinians were shot in Gaza by Israeli forces on Thursday, one left in a critical condition near the Karni goods crossing point, and another near the crossing into Israel at Erez, local medical sources said.
Further south, a bulldozer and half a dozen tanks patrolled an area around Rafah, where an official border terminal to Egypt provides Gaza's only link to the outside world that bypasses the Jewish state.
"They destroyed our greenhouses and olives trees in looking for tunnels," says local resident, Fatima al-Tarabi, admitting nonetheless that there were tunnels in the area.
Lieutenant Colonel Yossi Drori, an Israeli field commander, told army and public radio that a "few dozen" tunnels had been dug in the Rafah area.
"We are locating them thanks to intelligence provided to us from the Shin Beth (Israel's domestic security agency) and following our searches on the ground," Drori said.
Such tunnels are generally constructed so that they open up into houses, greenhouses or hen-houses, he added.
Local Palestinian, 40-year-old Ibrahim Abu Mohammed, openly admitted that tunnels were part of everyday life in the impoverished south.
"It's something normal. People aren't working so they dig tunnels to smuggle all sorts of things from Egypt," he said.
Defence Minister Amir Peretz says the army has no intention of reoccupying the Gaza Strip, which Israel left in September 2005 after a 38-year occupation, but that the fight against arms smuggling had to be speeded up.
A senior defence ministry official said the operation was to stop "terrorist organisations such as Hamas and Islamic Jihad from arming themselves with a view to taking control of the Gaza Strip and launching attacks on Israel".
Amos Gilad told army radio that the Egyptians "should deploy more efforts in order to be more effective" in looking for tunnels on their side.