Prime Minister Benjamin Netanyahu has said Israeli special forces captured the head of Hamas's internal security service in a ground operation in Gaza.

Netanyahu said the man, whom he did not name, was "engaged in attempts to restore Hamas's governance in Gaza and in deception concerning the demilitarisation of the Strip".

Israel's military and Shin Bet security service said a special forces unit arrested him in Gaza City on Tuesday and then took him to Israel for questioning.

Israeli air strikes carried out during the raid killed at least four Palestinians, including two children and a woman, medics said. Hamas condemned Israel's actions as a "grave crime" and violation of their ceasefire.

On Tuesday morning, Palestinians in the crowded Katiba area of western Gaza City reported heavy Israeli bombardment, with two vehicles hit and turned to wreckage.

Videos captured chaotic scenes, with the sound of gunfire and the aftermath of strikes.

"A jeep stopped in the middle of the street and started firing indiscriminately left and right. It carried on firing at us like rain for more than 15 minutes," Wafika al-Helou, who lives in a tent in the area, told AFP news agency. "It was terrifying."

Another witness, Mutaz Abu Asr, said there were five or six strikes in less than three minutes.

Palestinian media reported that Israeli special forces and Israel-backed Palestinian militiamen opposed to Hamas entered the area, but that their presence was discovered. Some Israeli media suggested that only a local armed militia operated on the ground.

A Palestinian security source told the BBC the target of the Israeli operation was a senior official in the Hamas internal security service.

A spokesman for Gaza's Hamas-run government media office, Ismail al-Thawabta, said: "An Israeli special forces unit attempted to carry out a security operation in Gaza City, but the unit was exposed while carrying out the mission."

The ensuing Israeli strikes "resulted in a number of people being killed and others injured, in addition to the deaths of several members of the special forces unit", he added.

Later, Hamas issued a statement saying that the Israeli raid and strikes in a densely populated area constituted "a serious crime, a deliberate disregard for the lives of civilians, and an extension of the brutal war of annihilation against our people in the Gaza Strip".