It was the first time Israel has bombarded the camp, the largest in Lebanon and home to some 50,000 people, since the start of the four-week-old Israeli offensive aimed an neutralising guerrillas of the Shiite movement Hezbollah.

The camp is located near Sidon, the main city of south Lebanon.

Two shells fired during the night destroyed a kindergarten run by Colonel Munir Maqdah, local chief of moderate Palestinian president Mahmud Abbas's Fatah movement.

Maqdah does not live there, and it was unclear whether he had been the target.

The Israeli military made no comment on the incident.

Said Abu Nasser, 55, was one of the two fatalities. He had recently taken refuge in the camp after fleeing his home in Jall al-Bahr, outside the port city of Tyre, to the south.

Anwar Awad, a 12-year-old boy in a neighbouring house, was also killed in the strike, which seriously damaged a number of the surrounding buildings and left two four-metre (12-foot) deep craters.

The victims were pulled out of a house destroyed by the strike in the north of the camp and taken to three hospitals in Sidon.

Two of the wounded were in serious condition.

Lebanon houses 12 refugee camps which accommodate half of the 380,000 Palestinians living in the country and have now been opened to Lebanese fleeing the Israeli bombardment.

Around 1,000 Lebanese have taken shelter in Ain el-Helweh, police said.

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