GAZA CITY, Aug 29, 2007 (AFP) - Israeli fire killed three Palestinian children and wounded one of their cousins on Wednesday as they played in a field in the northern Gaza Strip at the tail end of their summer holidays.

Yahya Ramadan Ghazal, 12, and his cousin Mahmud Mussa Ghazal, 10, were killed when Israeli artillery fire from across the border slammed into a field east of Jabaliya refugee camp, witnesses and a medical official said.

A nine-year-old cousin, Sara Suleiman Ghazal was critically wounded in the incident and rushed to the Kamal Radwan hospital in nearby Beit Lahiya where she died later, a medical official said.

A fourth child suffered less serious injuries in the attack, the sources said.

"We identified and fired at several rocket launchers aimed at Israel in the Beit Hanun industrial zone," an Israeli army spokeswoman said.

"We also identified several suspicious looking people fiddling with the rocket launchers before we fired. The army regrets terror organisations' cynical use of children," she added.

Israel said Palestinian militants in Gaza launched three rockets towards the Jewish state on Wednesday, but no impacts were recorded.

Israel has waged regular strikes and incursions against the densely packed Gaza Strip ever since radical Islamist movement Hamas, the country's sworn enemy, took armed control of the impoverished territory in mid-June.

Militants frequently use rural areas of northern Gaza to fire rockets into Israel and their launch sites are frequent targets of Israeli fire.

The latest strike came as Palestinian president Mahmud Abbas warned that a US-sponsored Middle East peace conference to be held later this year could fail unless Israel agrees on a framework of core issues.

"I don't think that conference will be useful if we go to it without clarifications for a solution and without a declaration of principles within a framework," Abbas said during a visit to Amman, a palace statement said.

Abbas met King Abdullah II after a fresh round of talks with Israeli Prime Minister Ehud Olmert in Jerusalem on Tuesday.

The Palestinians want a detailed framework agreement on core issues such as Jerusalem, borders and refugees, while Israel has talked about a more vague declaration of principles before the international peace conference.