Palestinians gather in the rubble of a house destroyed in an explosion in Gaza City, early Wednesday, July 12, 2006. A huge explosion destroyed the home of a Hamas activist in Gaza City early Wednesday, killing five people, including two children, and wounding 15 others, as an Israeli warplane flew overhead, residents and hospital officials said. [AP Photo]

An Israeli airstrike targeted the home of an Hamas activist in northern Gaza early Wednesday and killed seven people, officials and residents said, while Israel expanded a two-week offensive in the region with an incursion further south.

Palestinians said a high-level meeting of Hamas commanders was in progress at the residence in Gaza City just before the airstrike. Nervous Hamas officials carefully inspected the bodies but refused to comment.

The Israeli military said it attacked the home because it was a "meeting place for terrorists." It also confirmed Israeli forces were operating in southern Gaza as part of an effort to win the release of a captured soldier.

With tanks and troops on the move further south, a huge explosion destroyed the house of Hamas activist Dr. Nabil al-Salmiah, killing seven people, including two children, and wounding at least 24, hospital officials and residents said. There was no immeidate word if al-Salmiah was among the casualties.

They said the house was hit by a missile fired from an Israeli warplane. The Israeli military said it attacked the house because it was a "meeting place for terrorists" who were planning attacks and rocket launching.

Palestinian rescue teams dodged broken water pipes and electricity wires searching the rubble with bulldozers, shovels and their hands and to get to injured people screaming for help.

The scene resembled the aftermath of a 2002 attack, when an Israeli warplane dropped on one-ton bomb on the house of a Hamas leader in Gaza, killing him and 14 other people, including nine children. The attack set off complaints from human rights groups that are still reverberating.

The expansion of the Gaza offensive came hours after Israeli leaders authorized incursions into areas of the territory they have not yet entered.

Palestinians said they saw Israeli bulldozers leveling farmland and tanks moving across the border near the southern Gaza city of Khan Younis. The military ordered Palestinian security to leave their forward positions in the area.

The Israelis have not entered Khan Younis during the current offensive. Before Tuesday, Israeli forces had entered southern and northern Gaza and have approached Gaza City.

Israel launched its offensive on June 28, three days after Palestinian militants linked to the Hamas-led government captured an Israeli soldier in a cross-border raid. The operation was expanded last week to halt Palestinian militants from firing homemade rockets into Israel.

Prime Minister Ehud Olmert and his defense minister, Amir Peretz, ordered the new incursions into Gaza after Hamas leader Khaled Mashaal said Monday he would not free the captive soldier, 19-year-old Cpl. Gilad Shalit, security officials said on condition of anonymity because of the sensitivity of the operation.

Mashaal called Shalit a prisoner of war and demanded a prisoner swap, which Olmert has ruled out.

Responding to Mashaal's statement, Shalit's father, Noam, called on Hamas to allow the Red Cross to visit his son. Under Geneva Conventions, the Red Cross is supposed to have access to prisoners of war.

Israel has demanded the unconditional release of its soldier to end the offensive.

The invasion, Israel's largest ground operation in Gaza since withdrawing from the area last year, has caused widespread destruction, knocked out much of Gaza's power supply and left more than 50 Palestinians dead, most of them gunmen. One Israeli soldier has died.

The European Union began delivering aid to Gaza in a bid to repair some of the damage. Moderate Palestinian President Mahmoud Abbas said he had received $50 million from the Arab League.

It was the first aid delivered under internationally backed funding restrictions that bypass the Palestinian government led by the militant group Hamas since March.

Officials said the money had bypassed Hamas because of the international boycott. The European Union, along with Israel and the U.S., considers Hamas a terrorist group.

Mohammed Awad, the Palestinian Cabinet secretary, said Hamas agreed to allow Abbas to handle the money. He said the funds would be used to pay civil servants, who have not received salaries in four months.

The European Commission said it has started delivering $765,000 in monthly aid to hospitals in the Gaza Strip.

EU spokeswoman Emma Udwin said the funds, to purchase fuel for emergency generators at Gaza hospitals, was requested by Abbas after Israel destroyed six transformers at a power plant during its Gaza offensive. Gaza now has only sporadic electricity, almost all of it provided by Israel.

In Gaza, Hamas Prime Minister Ismail Haniyeh said the area is "on the verge of a genuine humanitarian crisis."

"There are shortages of food, fuel and essential needs of Palestinian citizens," he told his Cabinet, calling on the United Nations, Arab League, Muslim countries and the rest of the international community to help.

Also on Tuesday, a 15-month-old Palestinian boy injured in an Israeli missile strike last month died of his wounds at an Israeli hospital.