Palestinian authorities said Thursday they froze the bank accounts of nine Islamic charities to investigate whether the organizations funnel money to militants — the Palestinians' most striking action yet in a U.S.-sought clampdown on armed groups.

Israel welcomed the decision. But it pressed on with its hunt for militants, killing another Hamas fighter in a missile raid in the Gaza Strip. The army also moved briefly into northern Gaza to destroy brush providing cover for cross-border rocket attacks.

The airstrike in the southern Gaza town of Khan Younis killed Hamdi Kalakh, 23, as he was driving a donkey cart along a residential street, Palestinian officials and witnesses said. At least three other people were reported injured.

Hamas supporters said Kalakh was a member of Hamas' military wing.

The Israeli army said he was wanted for mortar, rocket and bomb attacks on Israeli soldiers and civilians. It said the raid thwarted an attack on the nearby Gush Katif Jewish settlement bloc, a few hundred yards from where Kalakh died.

Earlier, Israeli bulldozers and tanks had moved into northern Gaza after a rocket struck near the Israeli coastal city of Ashkelon, the militants' deepest strike yet using the crude homemade projectiles.

It was the first Israeli foray into Palestinian-controlled land since the army withdrew from parts of Gaza in July under the U.S.-backed "road map" plan. Security officials said the raid was not a prelude to a major operation.

Israeli Prime Minister Ariel Sharon said Hamas was trying to hit a power plant just south of Ashkelon. The rockets caused little damage or injury, but Israel considers them a strategic threat.

The Palestinian Monetary Authority issued the order to shut down 39 accounts of the nine charities on Sunday. The move became known Thursday, when hundreds of Palestinians relying on welfare payments from charities tried to pick up their monthly checks at banks in Gaza City. The banks said the accounts were blocked and turned them away.

Dore Gold, an Israeli government spokesman, praised the move.

"There have been charities that Israel has long suspected of being front organizations for Hamas," he said. "Anything that serves this need (of stopping the flow of money) is a positive development."

Palestinian Monetary Authority spokesman Abdel Maguid Mashrawi said the aim was to "monitor the money that is coming from outside, and to make sure that this money is used by these institutions for service purposes."

Officials said the government is trying to find a way to monitor the money transfers so that the welfare payments can resume.

According to a copy of the order, obtained by The Associated Press, the nine charities are: Al Jamiya Al Islamiya, the Islamic Young Women's Association, As-Salah Association, the Social Care Committee, the Palestinian Student Friends Association, the Islamic Charity for Zakat, Al Mujamma Al Islami, Al Nour Charity Association and Al Aqsa Charity Association.

In December, Palestinian Prime Minister Mahmoud Abbas, at the time No. 2 in the Palestine Liberation Organization, asked Saudi Arabia to divert donations for two of the charities — Al Jamiya Al Islamiya and As-Salah — to the Palestinian Authority. Abbas said he believed the two were fronts for Hamas, Palestinian officials said.

Hamas disputed any links to the charities and said the Palestinian Authority is acting under U.S. and Israeli pressure. The charities "have nothing to do with Hamas, and will not affect Hamas, but will affect the poor families," spokesman Abdel Aziz Rantisi said.

President Bush, responding to the Aug. 19 bus bombing in Jerusalem that killed 21 people, announced last week that the United States was freezing the funds of six senior Hamas figures in Gaza, Syria and Lebanon, as well as those of five charities he accused of funding Hamas.

Those five charities, four of which are based in Europe, are different from the nine operating in the Gaza Strip. But one of the nine — As-Salah — said it received funds from the four European charities on the U.S. list.

The cash-strapped Palestinian Authority has cut many welfare services in the past three years of Israeli-Palestinian fighting. Private charities, including Islamic ones receiving large sums of money from abroad, have filled the void.

Amir Abu Omarein, director of Al Mujamma Al Islami, said the move will hurt the poorest Palestinians. He said his charity, set up in the 1970s by Hamas spiritual leader and founder Sheik Ahmed Yassin, supports about 3,000 people, including the families of Palestinian prisoners, orphans, and those who were wounded in fighting with Israel.

About 2,000 welfare recipients marched to the headquarters of the Palestinian Monetary Authority in protest Thursday. "We are not terrorists. Freezing the bank accounts is a crime," read one of their banners.

Hanan Jaress, 45, a mother of 12, said she received the equivalent of $190 each month from Al Mujamma Al Islami. "This step will make me unable to feed my children," she said. "The Palestinian Authority gives me nothing."

Palestinian Information Minister Nabil Amr said the move was "part of our mission to implement the law on all the Palestinian institutions. ... We are not going to close any institution or harm any Palestinian citizen."

Under U.S. pressure, Palestinian leaders are urging armed groups to renew a cease-fire.

Palestinian police have taken some action against militants, sealing several tunnels from Egypt and arresting suspected arms smugglers. But they have been unable to halt rocket fire from Gaza and have held back on arresting militants or seizing their weapons.

On Thursday, Palestinian police said they traded fire with militants who launched homemade Qassam rockets at Israel, and that the armed men ran away.

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