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GAZA CITY, Gaza Strip – Israeli troops advanced into Gaza suburbs for the first time early Tuesday, residents said, hours after Prime Minister Ehud Olmert warned Islamic militants of an "iron fist" unless they agree to Israel's terms to end the fighting. Hamas showed no signs of wavering, however, with its leader, Ismail Haniyeh, saying the militants were "closer to victory."

Despite the tough words, Egypt said it was making slow but sure progress in brokering a truce, and special Mideast envoy Tony Blair said elements were in place for a cease-fire.

Sounds of the battle could be heard clearly before dawn Tuesday around the city of 400,0000 as the Israeli forces, backed by artillery and attack helicopters, moved into neighborhoods east and south of Gaza City. Israeli gunboats shelled the coast from the west.

The Palestinian residents told The Associated Press that Israeli tanks rolled into public areas of the Tel Hawwa neighborhood, pushing back militants. Tens of thousands of Palestinians live in apartment buildings in the neighborhood south of Gaza City.

One of the residents, Khader Mussa, 35, told The Associated Press by telephone that he saw two apartment buildings on fire. He said he was huddling in the basement of his building with 25 other people, including his pregnant wife and his parents. "The gates of hell have opened," he said. "God help us."

Several other buildings were on fire, witnesses said, including a lumberyard. Thick smoke blanketed the area.

The Israeli military confirmed that a battle was in progress but gave no details.

On Monday, as diplomats struggled for traction in truce efforts, Olmert stood within Hamas rocket range and said Israel would only end military operations if Hamas stops rocketing Israel, as it has done for years, and is unable to rearm after combat subsides.

"Anything else will be met with the Israeli people's iron fist," Olmert said. "We will continue to strike with full strength, with full force until there is quiet and rearmament stops."

As he spoke in Ashkelon, Israeli tanks, gunboats and warplanes hammered suspected hiding places of Hamas operatives who control the poor, densely populated territory just across the border. The Israeli military said Hamas fired about 20 rockets at Israel on Monday, fewer than previous days.

Just a few hours earlier, a rocket hit a house in Ashkelon but caused no casualties. Olmert addressed regional mayors in the relative safety of the basement of a public building during his two-hour visit.

Later, he tempered his tough talk, saying: "I really hope that the efforts we are making with the Egyptians these days will ripen to a result that will enable us to end the fighting."

Ashkelon is 10 miles from the border with Gaza. The Israeli military says Hamas has Iranian-supplied rockets that can reach 25 miles into southern Israel.

Meanwhile, Gaza's Hamas prime minister insisted on an Israeli withdrawal from Gaza and the opening of blockaded border crossings as part of any truce.

"As we are in the middle of this crisis, we tell our people we, God willing, are closer to victory. All the blood that is being shed will not go to waste," Haniyeh said on Hamas Al Aqsa television. But he said the group was also pursuing a diplomatic track to end the conflict that "will not close."

Haniyeh sat a desk in a room with a Palestinian flag and a Quran in the background. His location was unclear; Israeli airstrikes have targeted militant chiefs, and most are in hiding.

The fighting began Dec. 27 and has killed more than 900 Palestinians, about half of them civilians, according to Palestinian medical officials. Thirteen Israelis, including 10 soldiers, have been killed.

Inside Gaza, an Israeli battalion commander identified only as Lt. Col. Yehuda said Monday that troops had not met significant resistance and had found several houses booby-trapped either with regular explosives, or by sealing the windows and doors and opening cooking gas valves.

"A couple of days ago, an armed squad popped up from a tunnel that was concealed by a nearby building. We took them out with tank fire and a bulldozer," he said.

In another incident, the commander said, his men spotted a suicide bomber on a bicycle.

"He ran off to take cover in a building, presumably to draw us in," Yehuda said. "We demolished the building on top of him with a bulldozer."

Brig. Gen. Eyal Eisenberg said troops were "tightening the encirclement" of Gaza City and were "constantly on the move."

The comments by Yehuda and Eisenberg were approved by Israeli military censors. They spoke to a small group of reporters who accompanied Israeli units inside Gaza. Israeli forces have not allowed journalists to enter Gaza to cover the war.

Israeli warplanes pounded suspected Hamas positions in Gaza City, and navy gunboats fired at least 25 shells. Smoke billowed over buildings.

At least 20 Palestinians died Monday, some of them from wounds suffered on previous days, Gaza health officials said.

A girl, a doctor and a Hamas militant were killed in the northern Gaza Strip, said Basim Abu Wardeh, head of Kamal Adwan hospital.

The doctor rushed to evacuate the wounded from a building where two airstrikes had taken place and was killed by a third, Abu Wardeh said. Four other medics were injured, one critically.

The Israeli military said four soldiers were injured, one seriously, in what an initial inquiry concluded was a "friendly fire" incident in northern Gaza.

Israel has sent reserve units into Gaza to help thousands of ground forces already in the territory, and fighting has persisted despite a U.N. Security Council resolution calling for a cease-fire. Egypt has assumed a role as mediator between Israel and Hamas.

Talks "are progressing slowly but surely because each party wants to score some points," Hossam Zaki, the spokesman for Egypt's Foreign Ministry, told the British Broadcasting Corp. "We would like to be able to bridge some gaps and then proceed immediately to a cease-fire."

Zaki, however, said Egypt could not provide certain guarantees that Israelis seek, such as a halt to rocket fire.

"We'll enhance our efforts, but this is not an issue between Israel and Egypt," Zaki told the BBC. "It is an issue between Israel and Gaza, and this is something that will have to be worked out, as the (U.N.) Security Council says, in Gaza."

Much of the diplomacy focuses on an area of southern Gaza just across the Egyptian border known as the Philadelphi corridor that serves as a weapons smuggling route, making Egypt critical to both sides in any deal. The name of the corridor is an Israel military label.

Israel wants those routes sealed and monitored as part of any peace deal, and has been bombing tunnels that run under that border.

"I think the elements of an agreement for the immediate cease-fire are there," Blair said in Cairo. He added that, while more work needed to be done, he hoped to see a cease-fire "in the coming days."

Israeli Defense Ministry official Amos Gilad planned to travel Tuesday to Egypt for talks.

In Paris, French Foreign Minister Bernard Kouchner said European military observers should be sent to Gaza to monitor any eventual cease-fire.

Israel's chief military spokesman, Brig. Gen. Avi Benayahu, said the fighting was "difficult and complex" and that Hamas militants were setting boobytraps and firing missiles from the rooftops of civilian homes.

"There is a whole city built underground in Gaza. Lots of big weapons warehouses," Benayahu said. Soldiers also uncovered a tunnel dug inside Gaza that led 300 yards into Israel, he said.

In Monday's fighting, the army said it carried out more than 25 airstrikes, hitting squads of gunmen, mortar launchers and two vehicles carrying Hamas militants.

It said ground troops came under fire from militants in a mosque. An Israeli aircraft attacked the squad, and Israeli troops then took over the mosque, confiscating rockets and mortar shells.

With Israeli troops surrounding Gaza's main population centers, Israeli leaders have said the operation is close to achieving its goals. Security officials say they have killed hundreds of Hamas fighters, including top commanders, but there has been no way to confirm the claims.

Aid agencies said they have resumed relief operations in Gaza, but fighting still prevents them from evacuating the sickest people and reaching all those who need help.

International aid groups, however, say Israel is not doing enough to protect Palestinian civilians as well as aid workers.

As many 88 percent of Gaza's residents now require food aid, up from 80 percent before the war, said Helene Gayle, president of the international aid agency CARE.

GAZA CITY, Gaza Strip – Israeli jets and ground troops hammered at Hamas targets in the Gaza Strip and Islamic militants fired barrages of rockets at southern Israeli cities Friday, ignoring a U.N. resolution calling for an immediate cease-fire after two weeks of combat.

Smoke caused by explosions from Israeli military operations hangs in the sky over the outskirts of Gaza

The Israeli prime minister's office said the U.N. action was not practical, and senior Cabinet ministers decided to press on with the offensive. Israel will stop only when it succeeds in ending rocket fire from the Hamas-ruled territory, the government said.

Hopes that Thursday night's U.N. Security Council resolution would end Gaza's worst fighting in decades were further tempered by dismissive remarks from Hamas, angry that it was not consulted during exhaustive diplomatic efforts at the world body.

Israel launched a heavy air bombardment Dec. 27 in response to intensified rocket fire that has disrupted life in southern Israel. A week later, ground troops moved in, with artillery and tank fire that has contributed to a surge in civilian casualties that continued Friday on Gaza's ruined streets.

Seven members of the Salha family were killed by an Israeli airstrike on their house overnight, militants said. On Friday, crowds in neat rows bowed in prayer in front of their bodies, wrapped in funeral shrouds and flags.

In a hospital in Beit Lahiya, a northern Gaza town that has been particularly hard-hit, doctors treated a young girl whose left arm was torn off at the shoulder. She lay on a stretcher with a terrified expression on her face.

Such scenes have triggered anger throughout the Islamic world and elsewhere. There have been daily protests in the Middle East and in Europe, where there also has been a rise in anti-Semitic attacks.

In Washington, Secretary of State Condoleezza Rice said it is difficult to protect civilians in a place as densely populated as Gaza.

"It's also an area in which Hamas participates in activities like human shields and using buildings that are not designated as military buildings to hide their fighters," she told reporters. "So it's hard."

In Geneva, the top U.N. human rights official called for an independent investigation of possible war crimes in Gaza for an incident in which Palestinians said Israeli forces shelled a house, killing 30 people. Israel's military said it was not aware of the specific incident but would not have deliberately targeted the building.

By Friday evening, more than 20 Palestinians had been reported killed during the day, pushing the death toll for the two-week conflict to around 780, according to Gaza health officials who said at least half of those killed were civilians.

Thirteen Israelis have been killed — four of them by militant rockets, the rest in battle in Gaza.

Early Saturday morning, Gaza residents said warplanes attacked unoccupied buildings and sites in the southern town of Khan Younis, in Beit Lahiya, and around Gaza City. Flames and smoke could be seen rising into the sky but there were no reports of casualties.

By dawn, Israeli troops were reported seen in Gaza City's outlying neighborhoods, a little over a mile from the seafront Shati refugee camp, but still not entering built-up areas.

The Security Council resolution called for an immediate, durable and fully respected cease-fire, leading to the full withdrawal of Israeli troops from Gaza.

While the call was tantamount to a demand on Israel and Hamas to stop fighting, it did not require that Israel's troops withdraw until there was a durable cease-fire. The resolution also urged U.N. member states to intensify efforts to provide guarantees in Gaza to sustain a lasting truce, including prevention of arms smuggling — a key Israeli concern.

A six-month truce unraveled in November, and Israeli officials have said that lull allowed Hamas to bring in more advanced weaponry through hundreds of smuggling tunnels snaking beneath the Gaza border from Egypt's Sinai Desert.

In Israel's first official response to the U.N. resolution, Prime Minister Ehud Olmert's office said more Hamas rockets fired Friday "only prove that the U.N.'s decision is not practical and will not be kept in practice by the Palestinian murder organizations."

Senior Cabinet ministers issued a statement saying the military offensive would continue to protect Israeli citizens.

U.N. Secretary-General Ban Ki-moon spoke with Olmert by phone and Friday and told the prime minister that he was disappointed the violence was continuing in disregard of the resolution, according to Ban's office.

Hamas also dismissed the resolution, and spokesmen expressed annoyance they were not consulted.

"Nobody consulted Hamas or talked to Hamas. Nobody put Hamas in the picture and yet Hamas is required to accept it. This is unacceptable," Mohammed Nazzal, a senior Hamas official based in Syria, told Al-Arabiya television.

Hamas has said it won't accept any cease-fire deal that does not include the full opening of Gaza's border crossings. The U.N. resolution emphasized the need to open all crossings, which Israel and Egypt have kept sealed since Hamas militants forcibly seized control of the territory 18 months ago.

Israeli leaders oppose that step because it would allow Hamas to strengthen its hold on Gaza.

In Lebanon, Hamas official Osama Hamdan told Al-Arabiya that the group "is not interested in it (the U.N. resolution) because it does not meet the demands of the movement."

The foreign minister for the Palestinian Authority, which was driven out of Gaza by Hamas in 2007, criticized both Israel and Hamas for not accepting the demand for a halt to fighting.

"Both have responded to the resolution in the same way, in total disrespect," Riad Malki said at U.N. headquarters in New York. He said the Security Council should enforce its resolution, perhaps by levying sanctions.

Seven Hamas officials crossed into Egypt on Friday through the Gaza border crossing at Rafah, on their way to Cairo for negotiations with Egyptian officials on a truce with Israel. The talks were expected to begin sometime Saturday following the arrival of a Hamas delegation from Syria, including politburo members Mohammed Nasr and Imad al-Alami.

On reaching Cairo, Hamas delegate Ayman Taha told Al-Jazeera Television that his group wants an end to Israeli attacks and its withdrawal from Gaza. "We are not asking the impossible. This is our right to ask for it, and to protect our people and their blood."

The Islamic militant group, which was behind suicide bombings that killed hundreds of Israelis in past years, has been largely shunned by Western powers since coming to political power in 2006 Palestinian elections.

That isolation has only deepened since Hamas took control of the Gaza Strip in June 2007 in five days of fighting with the Fatah movement of Palestinian Authority President Mahmoud Abbas. Moderate Arab governments as well as the U.S. and its allies in Europe have supported Abbas' government, which controls only the West Bank.

The division has complicated efforts to advance peace efforts and reach a cease-fire in the latest fighting.

Despite the cool reception to the Security Council vote, the foreign ministers of Germany and Spain planned to visit the region to promote the U.N. resolution.

Israeli military operations showed no signs of abating Friday, despite a three-hour lull in fighting that has been instituted for three days running to allow aid to reach Gaza's distressed people.

Two Israeli missiles clipped the roof of a building housing the offices of Iran's English-language Press TV and a sister Arabic-language network, slightly injuring one person, the channel's correspondent, Ashraf Shannon, said. The military said it had no knowledge of any attacks in that area.

Heavy clashes were reported northeast of Gaza City as Israeli soldiers advanced under the cover of Apache helicopters firing machine guns.

Fares Alwan, 49, said he was eating with his family when their house came under fire.

"I took my kids and wife and started running away for cover," Alwan said. "We saw wounded people in the street while we were running."

Later Friday, some residents received recorded phone messages said to be from Israel's military warning of a planned escalation. A military spokesman said he had no knowledge of the calls.

Hamas rockets hit in and around two of the largest southern cities in Israel, Beersheba and Ashkelon, but no casualties were reported.

In Gaza's rubble-strewn streets, there was concern of a worsening humanitarian situation on the second day of a U.N. suspension of aid deliveries and the Red Cross restricted its medical operations to Gaza City, where it has a team assisting surgeons at the main Shifa hospital.

The decisions by the two organizations came after they said Israeli fire killed two contractors delivering aid for the U.N. and injured the driver of a Red Cross truck in separate incidents Thursday.

With just over half the territory's population of 1.4 million relying on the U.N. for food, U.N. officials said Friday that they planned to resume aid operations "as soon as practical," based on Israeli assurances that aid workers would be better protected.

Gaza's people have become increasingly desperate for food, water, fuel and medical assistance. One million people are without electricity and 750,000 are without running water, according to the U.N. Palestinian refugee agency.

GAZA CITY, Gaza Strip – Israel resumed its Gaza offensive Wednesday, bombing heavily around suspected smuggling tunnels near the border with Egypt after a three-hour lull to allow in humanitarian aid. Hamas responded with a rocket barrage.

AP – Palestinians pray over the bodies of people killed near a United Nations school Tuesday,

Despite the heavy fighting, strides were made on the diplomatic front with the U.S. throwing its weight behind a deal being brokered by France and Egypt.

While the Security Council failed to reach agreement on a cease-fire resolution, Egyptian diplomats said Egypt will host separate talks with Israel, Hamas and the Palestinian Authority in Cairo Thursday, but there would be no meeting between Israel and Hamas.

Israeli airstrikes killed 29 Palestinians on Wednesday after leaflets were dropped warning residents to leave the area "because Hamas uses your houses to hide and smuggle military weapons."

The fighting continued into Thursday. Palestinians reported more than 20 airstrikes around Gaza before dawn, killing one person and wounding 10. There were also reports of clashes between Israeli armored forces and Hamas militants in southern Gaza.

The casualties brought the total Palestinian death toll during Israel's 12-day assault to 689 and drove home the complexities of finding a diplomatic endgame for Israel's Gaza invasion. Ten Israelis have been killed, including three civilians, since the offensive began Dec. 27.

More than 5,000 people have fled the border area, seeking refuge at two U.N. schools turned into temporary shelters.

The fury of the renewed fighting made it appear each side was scrambling to get in as many hits as possible before a truce could materialize.

"I feel like the ground is shaking when we hear the shelling. People are terrified," said Fida Kishta, a resident of the Gaza-Egypt border area where Israeli planes destroyed 16 empty houses.

In Turkey, a Mideast diplomat who spoke on condition of anonymity because he was not authorized to speak publicly said that country would be asked to put together an international force that could help keep the peace. And diplomats in New York worked on a U.N. Security Council statement backing the cease-fire initiative but failed to reach agreement on action to end the violence.

"We are very much applauding the efforts of a number of states, particularly the effort that President (Hosni) Mubarak has undertaken on behalf of Egypt," Secretary of State Condoleezza Rice said. "We're supporting that initiative."

The army, which has refused to allow journalists into Gaza, permitted two TV teams to accompany soldiers on patrol for the first time. The footage showed soldiers walking through a deserted street in an unidentified location in Gaza.

The Israeli military correspondent who accompanied the soldiers said they were concerned about Hamas booby-traps. He said they were shooting through walls, throwing grenades around corners, going from house to house looking for Hamas gunmen and using bomb sniffer dogs. Buildings showed bullet and shrapnel marks. "We used a lot of fire," said an officer in the group, Lt. Col. Ofer.

Hamas, meanwhile, fired rockets, though at a slower pace than previous days, hitting the towns of Ashkelon and Beersheba with the sort of longer range missiles never seen before this war. Rockets were still hitting the cities after midnight, but there were no immediate reports of injury.

Despite the violence, a surprise announcement in Paris on Wednesday put a spotlight on diplomacy.

French President Nicolas Sarkozy said that both Israel and the Palestinian Authority had accepted the cease-fire deal, but he made no mention of Hamas, without whom no truce could work. The Palestinian Authority controls only the West Bank while Hamas rules Gaza — two territories on opposite sides of Israel that are supposed to make up a future Palestinian state.

Later, Israeli officials made it clear Sarkozy's statement was not exactly accurate.

"Israel welcomes the initiative of the French president and the Egyptian president to bring about a sustainable quiet in the south," said Israeli government spokesman Mark Regev.

But for Israel to accept the proposal, he said, "there has to be a total and complete cessation of all hostile fire from Gaza into Israel, and ... we have to see an arms embargo on Hamas that will receive international support."

For its part, Hamas said it would not accept a truce deal unless it includes an end to the Israeli blockade of Gaza — something Israel says it is not willing to do.

"There must be guarantees to ensure Israel will not breach this package, including halting the aggression, lifting the blockade and opening the crossings," said Ghazi Hamad, a senior Hamas adviser.

Growing international outrage over the human toll of Israel's offensive, which includes 3,000 Palestinians wounded — could work against continued fighting. So could President Bush's departure from office this month and a Feb. 10 election in Israel.

But Israel has a big interest in inflicting as much damage as possible on Hamas, both to stop militant rocket fire on southern Israeli towns and to diminish the group's ability to play a spoiler role in peace talks with Palestinian moderates.

The Israeli Cabinet formally decided on Wednesday to push ahead with the offensive while at the same time pursuing the cease-fire option. Israeli officials also rejected Hamas' call to open the border crossings, which Israel has largely kept closed since the group seized the territory by force in June 2007.

The military has called up thousands of reserve troops that it could use to expand the Gaza offensive. Defense officials said the troops could be ready for action by Friday.

Still, Israel briefly suspended its offensive Wednesday to allow humanitarian supplies to reach Gaza, and Israeli officials said such lulls would be declared on a regular basis.

The announcement came among growing warnings by the World Bank and aid groups of a humanitarian crisis. The Word Bank pointed to a severe shortage of drinking water and said the sewage system is under growing strain.

Solafa Odeh, a resident of the northern Gaza Strip town of Beit Lahia, said around 100 people in her community were lining up for fresh water outside a local grocery store Wednesday. "We were only allowed half a gallon each, and I saw some people walk away with their jerry cans empty," Odeh said.

Of the 688 Palestinians killed since Dec. 27, some 350 were civilians, among them 130 children, according to Palestinian officials.

During Wednesday's lull, Israel allowed in 80 trucks of supplies as well as industrial fuel for Gaza's power plant. Medics tried to retrieve bodies in areas that had previously been too dangerous to approach.

The Palestinian Red Crescent said in a statement that one of its ambulance drivers was shot by Israeli soldiers during the lull. The Israeli military said it had no knowledge of the incident.

Medic Mohammed Azayzeh in central Gaza pulled out three people, killed by shrapnel fire Sunday, from the border town of Mughraqa, where Israeli tanks had settled nearby. The medic said he also found a dead family of three, including a father cradling a 1-year-old boy.

In the Jebaliya refugee camp, residents on Wednesday held a mass funeral for 40 people killed a day before by Israeli mortar fire toward a U.N. school. Israel says Hamas militants fired mortar shells from an area near the school, and that Israeli responded to this attack.

The bodies, wrapped in blankets, were laid out in a long row on the ground, with mourners kneeling in Muslim prayer before them. Among the mourners was Mushir al-Masri, a Hamas legislator.

Also Wednesday, Israel released footage of suspected Hamas militants captured by Israeli troops. Israel's chief army spokesman, Brig. Gen. Avi Benayahu, said 120 suspected militants have been captured. He also said soldiers conducting searches have uncovered many explosive devices and tunnels.

"We uncovered many tunnels for kidnapping soldiers, at least one car bomb, booby trapped dolls, tunnels — an underground city," Benyahu said on Israel TV's Channel 10.

GAZA CITY, Gaza — Israel ignored mounting international calls for a cease-fire Monday and said it won't stop its crippling 10-day assault until "peace and tranquility" are achieved in southern Israeli towns in the line of Palestinian rocket fire.

AP – Palestinians carry the bodies of three toddlers Ahmed, Mohamed, and Issa Samouni, who according to Palestinian

Israeli forces seized control of high-rise buildings and attacked smuggling tunnels and several mosques in a relentless campaign against Hamas militants that took an increasing toll on civilians. The United Nations said at least 500 people have died in the Gaza fighting, about a quarter of them civilians.

Israel also suffered casualties. Late Monday, three Israeli soldiers were killed by what Israeli officials said was an errant tank round from one of its own guns.

Arab delegates met with the U.N. Security Council in New York, urging members to adopt a resolution calling for an immediate end to the attacks and a permanent cease-fire. At the same time, diplomats and European leaders traveled the region in an effort to stop Israel's expanding ground and air offensive.

In a serious urban clash, Israeli troops and Hamas militants fought a gunbattle on the outskirts of the crowded Gaza City neighborhood of Shajaiyeh, Israeli defense officials said. Details also emerged of an unsuccessful attempt by Hamas fighters to capture Israeli soldiers hours after the ground operation began Saturday with a withering round of artillery fire.

Military spokesman Brig. Gen. Avi Benayahu told Israeli TV the assault was going according to plan with forces sweeping through Palestinian rocket launching locations near the border.

Despite Israeli claims that casualties have been heavy among militants, no injured Hamas fighters were seen Monday by an Associated Press reporter at Shifa Hospital, the Gaza Strip's largest. Instead, the hospital was overwhelmed with civilians. Bodies were two to a morgue drawer, and the wounded were being treated in hallways because beds were full.

At least 20 Palestinian children were killed during the day Monday, said Dr. Moaiya Hassanain, a health official. Most confirmed deaths have been civilians.

Three brothers died in an attack on a town outside Gaza City, a Gaza health official said. They were carried to a cemetery in an emotional funeral. One of them, Issa Samouni, 3, was wrapped in a white cloth, showing only his pale, yellow face. A man delicately placed him in a dark grave cut into the earth.

Later, five civilians were killed when a shell fired by an Israeli ship hit their house on the Gaza shore, hospital officials said. Palestinians said Israeli attacks intensified before dawn Tuesday.

Gaza health officials reported that since the campaign began on Dec. 27 more than 550 Palestinians have been killed and 2,500 wounded, including 200 civilians. U.N. humanitarian chief John Holmes put the Palestinian toll at 500, with about 125 of them civilians.

Holmes called the Gaza strife an "increasingly alarming" humanitarian crisis, directly contradicting Israeli denials that its offensive caused the growing problem. He said Gaza is running low on clean water, power, food, medicine and other supplies since Israel began its offensive. Israeli leaders have maintained there is no humanitarian crisis, and that they have been delivering vital supplies.

Late Monday, the Israeli military said three soldiers were killed and 24 others wounded by friendly fire when a tank shell hit their position outside Gaza City. The military said a colonel who commanded an infantry brigade was among the injured.

Israeli defense officials said earlier that one soldier was killed when soldiers fought off an attempt by Hamas fighters to capture Israeli soldiers hours after the ground operation began. They said the infantrymen were advancing up a strategic hill before dawn Sunday when militants emerged from a tunnel and tried to drag two Israeli infantrymen inside.

Hamas already holds one Israeli soldier, captured in June 2006, and another would be an important bargaining chip.

That death and the three soldiers killed by friendly fire brought to eight the number of Israelis killed since the offensive began. One other soldier and three civilians were killed during the initial air phase of the offensive. Israeli officials are concerned that heavy casualties amoung its troops could undermine what has so far been overwhelming public support for the operation.

In Shajaiyeh, troops seized control of three six-story buildings on the outskirts, climbing to rooftop gun and observation positions, Israeli defense officials said. Residents were locked in their rooms and soldiers took away their cell phones, a neighbor said, quoting a relative who called before his phone was seized.

"The army is there, firing in all directions," said Mohammed Salmai, a 29-year-old truck driver. "All we can do is take clothes to each other to keep ourselves warm and pray to God that if we die, someone will find our bodies under the rubble."

Fighter jets attacked houses, weapons storage sites, a pair of mosques and smuggling tunnels, as they have since the start of the offensive. Israel has attacked several mosques during the campaign, saying they were used to store weapons.

In another strategic move, Israeli forces seized a main highway in Gaza, slicing the territory in two.

Israeli forces detained 80 Palestinians — some of them suspected Hamas members — and transferred several to Israel for questioning, said military officials, speaking on condition of anonymity because they were not allowed to release the information.

The Gaza City area was rocked by shelling from both sides as gunboats in the sea and artillery and tanks closing in from the east unloaded thunderous fire.

After dark, the shelling reached deeper into residential areas. Fireballs lit up the horizon to the east, setting off blazes on the ground and silhouetting Gaza's tall buildings. Tracer fire ripped across the skyline.

The State Department said the U.S. was pressing for a cease-fire that would include a halt to rocket attacks and an arrangement for reopening crossing points on the border with Israel, said spokesman Sean McCormack. A third element would address the tunnels into Gaza from Egypt through which Hamas has smuggled materials and arms.

President George W. Bush emphasized "Israel's desire to protect itself."

"The situation now taking place in Gaza was caused by Hamas," he said.

The deputy head of Hamas' politburo in Syria, Moussa Abu Marzouk, rejected the U.S. proposal, telling the AP the U.S. plan seeks to impose "a de facto situation" and encourages Israel to continue its attacks on Gaza.

French President Nicolas Sarkozy, who unsuccessfully proposed a two-day truce last week, met with Palestinian President Mahmoud Abbas, who lost control of Gaza to Hamas in June 2007.

Europe "wants a cease-fire as quickly as possible," Sarkozy said after meeting Abbas, urging Israel to halt the offensive, while blaming Hamas for acting "irresponsibly and unpardonably."

A European Union delegation met with Israeli Foreign Minister Tzipi Livni.

"The EU insists on a cease-fire at the earliest possible moment," said Karel Schwarzenberg, the foreign minister of the Czech Republic, which took over the EU's presidency last week from France. Rocket attacks on Israel also must stop, Schwarzenberg told a news conference with Livni.

The EU brought no truce proposals of its own because the cease-fire "must be concluded by the involved parties," he added.

As the bruising campaign entered its 10th day Monday, Hamas pummeled southern Israel with more than 30 rockets and promised to wait for Israeli soldiers "in every street and every alleyway."

Israeli Defense Minister Ehud Barak said the offensive would go on until Israel achieved "peace and tranquility" for residents of southern Israel.

One of the rockets struck a large outdoor market that was closed at the time in the town of Sderot, just across Gaza's northeastern border. Another hit a kindergarten in the coastal city of Ashdod, north of the strip. The kindergarten, like schools across southern Israel, was closed and empty because of the rocket threat.

Israel has three main demands: an end to Palestinian attacks, international supervision of any truce, and a halt to Hamas rearming. Hamas demands an end to Israeli attacks and the opening of border crossings to vital cargo.

Livni said the operation was designed to change the rules of Israel's struggle against Hamas after years of firing rockets at Israel. From now on, she said, "when Israel is targeted, Israel is going to retaliate."

Israeli military spokeswoman Maj. Avital Leibovich said Hamas was to blame for civilian casualties because it operates in densely populated areas.

"If Hamas chose cynically to use those civilians as human shields, then Hamas should be accountable," she said.

Hamas leader Mahmoud Zahar exhorted Palestinians to fight the Israeli forces and target Israeli civilians and Jews abroad.

"The Zionists have legitimized the killing of their children by killing our children. They have legitimized the killing of their people all over the world by killing our people," Zahar said in a grainy video broadcast on Hamas TV.

Israel's operation has sparked anger across the Arab world and has drawn criticism from countries such as Turkey, Egypt and Jordan, which have ties with Israel and have been intimately involved in Mideast peacemaking.

In Beirut, Lebanon, protesters tried to pull away barbed wire blocking their path to the U.S. Embassy. They were driven back with heavy blasts of water.