GAZA CITY (BBC) -- Israeli aircraft have fired missiles at a car in Gaza City, killing three people, at least two of them said to be Hamas fighters. Israeli missiles also targeted metal workshops that were allegedly being used to make bombs elsewhere in Gaza.

Israel says it is retaliating against Palestinian missile attacks.

Meanwhile, Hamas and rival Palestinian militia group, Fatah, have announced another ceasefire in an effort to curb bloody infighting in Gaza.

It is the fifth such truce since violence broke out last week. Since then about 50 people have died in clashes between the two groups.

More than 20 people have also died in Israeli air strikes on Gaza in the last five days.

Israeli missiles struck a car carrying Hamas fighters in the early hours of the morning yesterday.

The Israeli military said the large size of the explosion indicated the car had been carrying weapons.

Of the three killed, at least two were reportedly Hamas militants.

Missiles also destroyed two other buildings in Gaza that Israel says were metal workshops used to manufacture bombs and missiles. No one was hurt.

A Hamas spokesman, Fawzi Barhoum, told the Associated Press news agency he expected the Israeli action to strengthen the latest ceasefire between Hamas and Fatah.

"No one would accept to fight one another while the Israelis are shelling Gaza," he said.

Gunmen climbed down from rooftop positions and dismantled roadblocks as the ceasefire began to take effect.

Relieved residents who had been barricaded for days amid the street fighting took the opportunity to stock up on groceries and other necessities.

Earlier on Saturday morning, three Palestinians died in northern Gaza after Israel launched an air strike. A series of truces has failed to stop Gaza's violence

The Israeli army said the raid had targeted "three members of a Qassam rocket-launching cell that had just fired a rocket towards Israel".

Palestinian residents said the dead men were shepherds with no connection to the rocket attacks.

On Saturday evening, another Palestinian was killed in the Jabaliya refugee camp by an Israeli strike.

Israel's Defense Minister Amir Peretz has said attacks on the Hamas movement in Gaza will continue until rocket attacks on Israel stop.

Israel resumed air strikes on Tuesday after a six-month lull, following repeated rocket attacks on Israel.