The blast, at the Erez crossing, hit a building where Palestinian labourers enter a nearby industrial complex, Reuters quoted Israel radio as saying.

An Israeli ambulance service spokesman told Reuters that at least eight people were being treated for injuries.

The Islamic militant group Hamas and the Al Aqsa Martyrs' Brigades, linked to Palestinian leader Yasser Arafat's Fatah movement, have claimed responsibility for the blast, according to Reuters.

The crossing is the main entry point into Israel for thousands of Palestinian workers. "All the casualties are Israeli, including four dead," a military source said.

At the time of the explosion, just after 10am (8am GMT), the crossing was filled with workers waiting to cross, according to Israel Radio.

Palestinian witnesses said a woman waiting to pass through security checks to the Israeli side blew herself up, according to Associated Press.

A witness identified as Amina, 42, told AP that the bomber was one of four Palestinian women who were waiting in a security building.

"I heard soldiers screaming, the blast was very strong, and I saw one of the women, the last one who went into the room, bleeding from her legs," she said.

Another witness, who did not want to be identified, told AP that one woman waiting with a group of labourers was walking strangely. She brushed aside offers of help and the blast went off shortly afterwards.

The Gaza Strip is surrounded by an Israeli security barrier, and none of the suicide bombers responsible for the deaths of hundreds of people inside Israel in the past three years of violence have come from there.

Erez, however, has been the target of occasional attacks.

This is the first suicide bomb since a December 25 explosion at a Tel Aviv bus stop killed four people.