The Israel Defense Forces claimed responsibility for the blast, saying an Israeli air force helicopter was used to target senior Hamas leaders in Gaza City.
Early reports that Ahmed Jabari, a Hamas military commander in the region, had been killed were inaccurate. Palestinian security sources and hospital sources said Jabari was wounded in the attack, but was treated at a hospital and released.
The home was in the Shajaiyeh neighborhood of Gaza City and belonged to Jabari. Palestinian security sources said an Israeli Apache helicopter fired a missile which destroyed the home in a blast that could be heard throughout much of the city.
Shortly after the blast shook the neighborhood, crowds of people, including militants, took to the streets and gathered at Shifa Hospital, where the wounded had been taken, informs CNN.
According to Reuters, Prime Minister Ariel Sharon plans to pull Israeli settlers and soldiers out of the Gaza Strip by the end of next year and Israeli forces and Palestinian militants have been bent on scoring "victory" in the run-up to the withdrawal.
Medics said five people -- Jabari's son, a brother, a son-in-law, a cousin and one of Rantissi's son-in-laws -- were pronounced dead in hospital and about a dozen others were wounded. At least three of the dead were known militants.
"We heard a loud explosion and ran outside," one neighbour said. "We saw (Jabari's) house was completely on fire."
Jabari, in his 40s, spent 13 years in Israeli prisons before being released in 1995 under interim peace deals. Hamas, dedicated to Israel's destruction, has carried out dozens of suicide attacks during a nearly four-year-old Palestinian uprising.
On the Israeli political front Sharon, facing a mutiny in his right-wing Likud party over his plan to "disengage" from the Palestinians in Gaza, approved 1,000 more Israeli settler homes in the West Bank in a move that drew a cautious U.S. response.
Likud holds a snap convention on Wednesday at which party nationalists hope to vote down his proposed alliance with the dovish Labour party led by Shimon Peres, a fervent proponent of withdrawal. Sharon's aides said he would pursue his Gaza plan with a "unity" coalition whatever the result of the non-binding Likud vote.
The package of invitations to contractors to bid on the housing projects had been shelved several weeks ago to avoid possible discord with Washington, whose Middle East peace "road map" prescribes a freeze on settlement building.
But Housing Minister Tzipi Livni said the construction bids would adhere to "understandings" with the United States that new homes could be erected within current settlement boundaries.
U.S. officials said Washington was studying details of the tenders before passing judgment.
WTVO publishes that witnesses and officials on both sides say two of the dead were Hamas members and a third belonged to Islamic Jihad. The other two dead weren't identified. Hospital officials say all five were adults. Seven people were wounded, four critically.
Witnesses said they did not see or hear a missile hit the house, but saw an unmanned Israeli aircraft overhead at the time. Israeli air strikes have been aimed at a number of militants.
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