The 12-story buildings were destroyed in retaliation for an attack early Friday in which two Palestinian gunmen infiltrated an army outpost in the Jewish settlement of Netzarim and killed three soldiers, including two women. Israel said the buildings were used to plan Friday's attack.

The buildings were located on a sandy hill overlooking the heavily guarded settlement. The explosion could be felt miles away and sent plumes of black smoke and debris into the air, damaging many nearby Palestinian homes.

Coupled with political uncertainty in the Palestinian leadership, the violence pushed Middle East peace efforts further into the background.

In one of Sunday's clashes, a Palestinian, armed with a rifle and hand grenades, approached an army outpost guarding a Jewish settlement bloc, the military said. An army guard saw the gunman and alerted a nearby force. A fierce gunbattle erupted and the Palestinian was killed, the military said.

A few miles away, troops noticed four Palestinians crawling toward another army outpost, the military said. Troops fired on the group and hit two. Two others fled, the military said. The army said at least one Palestinian had been killed.

Friday's attack on Netzarim was carried out jointly by the Hamas and Islamic Jihad militant groups. One of the gunmen was killed and the other escaped.

Before dynamiting the three apartment buildings, Israeli troops blew up a Palestinian police post where the military said one of Friday's attackers had fled. The gunman received shelter and assistance from Palestinian police, the army said.

Shortly afterward, troops set off explosives in and around the three tall buildings, which belong to Palestinian Preventive Security, the main Palestinian force in Gaza. The buildings, the army said, were used "by the terrorists to plan terrorist attacks."

"The terrorists who carried out the attack on Netzarim last week used the buildings for several weeks and collected prior intelligence for the attack," Brig. Gen. Gadi Shamni, commander of the Gaza division, told Israel Radio.

Before the huge blasts rocked the area, Israeli soldiers ordered about 2,000 residents of nearby buildings in southern Gaza City out of their homes.

Maj. Sharon Feingold, an Israeli military spokeswoman, said the 2,000 residents were temporarily evacuated "for their own safety." Later, the residents returned to their homes.

When they came back, they found considerable damage, said Moreed Naim, 29, an off-duty Palestinian firefighter who lives in the neighborhood. "All the windows were broken, some of the furniture was damaged, and my car was destroyed," he said.

Residents said soldiers fired rifles and machine guns, wounding two people and pock-marking walls.

As Palestinians left their homes, the settlers at Netzarim moved into bomb shelters for protection, the military said.