At least one Palestinian was killed and four others were wounded by gunfire while crossing from Israel into the Gaza Strip on Sunday after completing the annual hajj pilgrimage to Mecca, Palestinian medics said.

The medical workers said the pilgrims had been hit by Israel Defense Forces gunfire at the Erez crossing on the northern Gaza border. Witnesses said soldiers first fired into the air and then at the crowd of pilgrims.

An IDF spokeswoman said the army was not aware of any shooting in the area.

Palestinian officials said about 700 pilgrims had crossed back into Gaza on Sunday, having returned from Saudi Arabia via Jordan.

Earlier this month, Israel agreed to let about 900 Gaza pilgrims travel through Israeli territory en route to Mecca.

Egypt moves stranded Palestinian pilgrims to Sinai camps

A separate group of more than 1,000 Palestinian pilgrims, including members of the Hamas militant group, protested Sunday, refusing Egyptian attempts to move them into camps in Sinai until a dispute over how they will return to the Gaza Strip is resolved.

Unlike the group that traveled to Mecca through Israel, those pilgrims traveled to Mecca through the Rafah crossing on the Egypt border after Cairo agreed to let let them pass through.

The standoff is the latest outbreak of tensions over efforts by Egypt, Israel and the Palestinian Authority to isolate the Gaza Strip since Hamas took over the tiny coastal strip in June.

Egypt has kept its Rafah border crossing with Gaza closed, a move seen as supporting Hamas' rival, Palestinian President Mahmoud Abbas. But Egypt is also sensitive over criticism that it is helping worsen the humanitarian situation in impoverished Gaza.

At the same time, Egypt has come under increasing criticism from Israel, which accuses it of not doing enough to stop smuggling of weapons and money through Sinai tunnels into Gaza. Egypt has angrily denied the accusations, insisting it is doing all it can.

The standoff over the pilgrims began Saturday, when some 3,060 Palestinians returning from the hajj in Saudi Arabia arrived by ferry at the Egyptian Red Sea port of Nuweiba in southern Sinai, heading back to Gaza.

The pilgrims, along with Hamas, have rejected Egyptian attempts to have them return through the Israel Defense Forces-controlled Kerem Shalom crossing in Israel, fearing that the IDF will arrest Hamas members among them.

Israel, in turn, fears that if the pilgrims are allowed to return to Gaza through Rafah - where Israel has no control - Hamas militants might get through and sympathizers could smuggle cash to Hamas in Gaza.

Egypt on Sunday decided to move the pilgrims to 11 temporary camps set up outside the Mediterranean coastal city of el-Arish, where they would stay until the dispute is resolved, a security official said.

Hamas condemned the decision to move the pilgrims into the tents. "This is additional suffering for the pilgrims," the group said in a statement released in Gaza, saying the tents will lead to a humanitarian and health crisis.

Egyptian President Hosni Mubarak said Sunday that his country was doing everything it could to resolve the crisis and said inflammatory rhetoric only makes the job more difficult.

"We face a very critical situation because it is being said that they (the pilgrims) could carry prohibited things (into Gaza)," Mubarak told reporters in Cairo.