(Adds third death)

GAZA, Aug 29 (Reuters) - Three Palestinian children were killed on Wednesday after Israeli soldiers fired at figures they spotted near rocket launchers in the northern Gaza Strip.

Palestinian residents found the bodies of two boys, aged 10 and 12, in an area near where militants had fired rockets towards Israel. They said the boys died of shrapnel wounds.

A 10-year-old girl found near them was critically injured by shrapnel as well and died in hospital hours later, doctors said. Residents said the three were cousins. There were no witnesses to the explosion that killed the children.

"The IDF (Israel Defence Forces) targeted several launchers aimed at Israel in the Beit Hanoun industrial area," the Israeli army said in a statement. "Several Palestinians were identified handling the launchers at the time."

"The IDF wishes to express sorrow for the use the terror organisations make of the active participation of teenagers in terror attacks," the statement said.

An army spokeswoman declined to say what weapons the soldiers had used. More than 90 rockets fired by Palestinian militants in Gaza in the past month landed in Israel, she added.

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