Around 20 people were also wounded when two teenage bombers blew themselves up in the attacks jointly claimed by the Palestinian militant groups Hamas and the Al-Aqsa Martyrs Brigades, police said.

"We have 10 dead as well as the two bombers," police spokesman Gil Kleiman told AFP at the scene.

In an apparent retaliation for the attacks Israeli military helicopters fired a dozen rockets at targets in Gaza City overnight, wounding one person, Palestinian officials said Monday.

The helicopters attacked targets in central and east Gaza City, which led to power cuts, the security officials said.

Among the targets were two steel works in Gaza City's al-Nasser neighborhood but it was not immediately clear why they were hit.

The Israeli police spokesman said most of the victims in Ashdod died in a blast at a citrus fruit packaging factory inside the port while the remainder were killed in a second explosion at an office just outside the perimeter of the port.

An Israeli government spokesman said almost immediately that a summit between Prime Minister Ariel Sharon and Palestinian premier Ahmed Qorei, which was expected to take place in just two days, could not be held in such an environment.

"I can confirm that this meeting will not take place in these conditions," Pazner told AFP. "A meeting cannot be held in the midst of terror attacks.

Qorei's office said in a statement that "we are sorry for this cancellation of tomorrow's (Monday's) meeting", adding that "we hope talks will be resumed as soon as possible."

Hamas and Al-Aqsa said that the two bombers both came from the Jabilya refugee camp in the northern Gaza Strip.

It is believed to be the first time that Palestinian militants from Gaza have carried out a suicide bombing since the start of the Intifada in September 2000. Gaza has been sealed off from the rest of Israel by a massive security fence.