The Israeli army destroyed several warehouses and installations during an operation in eastern Gaza City Thursday, witnesses and sources said.

The military operation took place in an industrial zone that has not been functioning since Israel imposed a blockade on Gaza in 2007 which mainly blocked export.

The zone is located near Karni, the largest commercial crossing which has been permanently closed by Israel earlier this year and replaced by another crossing in the southeast end of the Gaza Strip.

Israeli bulldozers and tanks operated in the area, destroying eight stores of Palestinian merchants and causing damage to a waste water treatment facility for the area, the witnesses said.

The sources said the losses of the Israeli operation were around one million U.S. dollars.

There was no tension on the border when the Israeli tanks entered the industrial zone, according to the witnesses.

Mahmoud Al-Yazji, head of the Palestinian Chamber of Commerce, condemned Israel's operation. "The aim of this operation is to destroy the rest of the industrial zone," he said in a statement.

"This is to kill any chance of reopening the Karni crossing, which is the lifeline of the Gaza Strip," he added.