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JEBALIYA REFUGEE CAMP, Gaza Strip – Crouching against piled mattresses in a room crammed with refugees, Bissan Abu al-Eish focused on her homework, blocking out the relentless shrieks of dozens of toddlers and the stench of overflowing latrines.

"I'm so happy to be studying," said the 9-year-old girl, bent over the new textbook she received this weekend when classes resumed for 200,000 Gaza children at United Nations facilities.

Beyond being schooled by the U.N., Abu al-Eish and her seven siblings eat the agency's food, wear its clothing and now live in one of its buildings after their own house was leveled during Israeli bombardments on Gaza.

Hamas may be politically in charge of the Gaza Strip, but it's to the U.N.'s relief agency that the majority of the 1.4 million Gazans turn for health care, garbage collection, food assistance and just about every other service usually provided by a state.

With much of the territory devastated by Israel's latest military offensive, the agency's job is bound to get even bigger.

Many expect the U.N.'s agency for Palestinians to take the lead in reconstruction, though its role is currently limited to the refugee camps that house more than 1 million of Gaza's population. The U.N. spearheading efforts to rebuild Gaza could open a door to international donors, many of whom don't want to give Hamas money because the group doesn't recognize Israel and is considered a terror organization by the U.S. and European Union.

It is estimated that $2 billion is needed to repair the 21,000 homes damaged or destroyed, along with factories and government buildings, in the three-week Israeli attack to end Hamas' rocket-firing. Fundraising has hardly begun, and the question of how the money will be funneled remains unanswered.

"We're delivering the services of a state, until the state is established," John Ging, the head of Gaza operations for the U.N. Relief and Works Agency, UNRWA, told The Associated Press this weekend.

At the same time, it must exist side-by-side with Hamas' government — and take care to maintain its neutrality, which some Israelis question.

In one classroom Saturday, when UNRWA schools reopened, a Palestinian teacher was filmed asking children about their trauma during the war. The unidentified teacher then told the children that Palestinians have to "wage war against them (Israelis) until they leave their land," and asked her students, aged about 8, how they should react.

Two children in the class suggested hurling stones or rockets back at Israel. "Okay," the teacher said, apparently summing up her class' position. "We throw rockets at them, we throw stones at them," she said.

Ging said such behavior is "completely unacceptable," and will be "dealt with in the most severest of fashions." He said the teacher would likely be removed once identified. Teachers have been fired from UNRWA in the past for incitement.

Ging said that following the latest war, which ended Jan. 17, UNRWA briefed teachers — themselves often victims of the fighting — on how to channel the children's grief away from revenge and violence. In schools across the territory, teachers led students in games to ease their trauma and encouraged them to talk about lost classmates to deal with their deaths.

"We're in a battle with extremism here in Gaza," said Ging, adding that UNRWA schools aim to "guide (children) to a civilized place."

Robert Blecher, the senior Middle-East analyst for the Washington-based International Crisis Group think-tank, says UNRWA's staff comes from a cross-section of society and it's "logical that this staff reflects the political spectrum of Gaza, of which Hamas is obviously an important component."

"But I've never seen any evidence of bias towards Hamas in any UNRWA actions or distributions," he said.

The 60-year-old agency has been in Gaza so long, and its institutions are so deeply entrenched, that it has been able to conduct its operations with little contact with the local government for years — even before Hamas came to power.

Israeli officials have in the past been critical of some aspects of UNRWA's operations, especially in the field of education, pointing to anti-Israeli content in past textbooks. The books have since been replaced, and 2003 and 2004 studies commissioned by the U.S. State Department found that the texts did not contain material promoting hatred of Israel.

Hamas praises UNRWA for providing Gazans what it can't. "We hugely appreciate their great efforts to help our people," Hamas spokesman Fawzi Barhoum told AP.

UNRWA was created in 1949 to take care of Palestinian refugees and operates in camps across the Middle East. In Gaza, it has some 17,000 permanent or temporary staff. It has a budget of $350 million and provides services — including food distribution — in the camps. Many non-refugees also benefit, sending their children to its schools.

The organization is funded almost entirely by voluntary contributions from countries, its largest donors include the United States, the European Union, Sweden and Britain. Louis Michel, the European Union's humanitarian chief, said the EU is by far the largest overall donor to the Palestinians.

Ging says UNRWA is able to take on the daunting task of rebuilding Gaza refugee camps. But, he says, this will only be possible if Israel allows the blockaded territory to receive enough of the humanitarian aid already piling up at its border.

Israeli Cabinet Minister Isaac Herzog said Israel is adequately opening the crossings.

"Humanitarian aid is entering Gaza at a rate of 150 trucks a day, which is the maximum amount of aid that the Palestinians can absorb at this time," Herzog, who oversees what is allowed into the territory, told AP on Monday. Israel and Egypt have largely sealed their crossings into Gaza since Hamas took over the territory in 2007.

The American Near East Refugee Aid said it has delivered more than $2.5 million of food and medical supplies. On Monday, Michel announced euro58 million ($74 million) in emergency aid for Palestinians affected by the conflict, but insisted the money wouldn't go through the Hamas government.

"Hamas is a terrorist movement," he told reporters while standing in front of a food warehouse at UNRWA's main compound, funded by the EU and largely destroyed by Israeli shelling.

This leaves UNRWA to provide most emergency aid — and puts it in a key position when funding starts coming in for rebuilding.

How fast the border could open, however, remains unclear. Israel says any agreement to fully open Gaza's borders must include guarantees Hamas will be prevented from smuggling new weapons in.

Bissan Abu al-Eish seemed far from such concerns.

"I'm worried about all these new words," the little girl said, skimming through her new Arabic textbook in the U.N. youth community center where she now lives, crammed with 42 other families from Jebaliya refugee camp.

Thousands took refuge in UNRWA schools during the war. Most have since left. But Nofal Abu al-Eish, Bissan's father, said his family of 10 had nowhere to go since their house was destroyed. The $150 given by UNRWA to refugees to relocate in rentals aren't enough, he said.

GAZA CITY, Gaza Strip – Israel said it was approaching the "endgame" of its three-week offensive against Gaza's Hamas rulers and scheduled a Security Cabinet vote Saturday on a truce proposed by Egypt. Under the cease-fire plan, fighting would stop immediately for 10 days, but Israeli forces would initially remain in Gaza and the border crossings into the territory would remain closed until security arrangements are made to ensure Hamas militants do not rearm.

If Israel agrees to stop shooting, Israel radio said a truce summit would be held in Cairo Sunday with U.N. Secretary-General Ban Ki-moon and Israeli leaders expected to attend.

Hamas' political chief rejected Israel's conditions, but negotiators for the Islamic militant group were in behind-the-scenes contact with mediators in Cairo and signaled it was time for a truce.

"If they are ready, we are ready," Osama Hamdan, a top Hamas figure, told Sky News.

Israel launched its military offensive Dec. 27 to try to halt Hamas rocket attacks on southern Israel, and top envoys were in Cairo and Washington on Friday to discuss cease-fire terms.

Palestinian medics say the fighting has killed at least 1,140 Palestinians and Israel's bombing campaign caused massive destruction in the Gaza Strip. Thirteen Israelis have been killed, four by rocket fire, according to Israel.

The Israeli vote was scheduled hours after the U.S. paved the way by agreeing to provide assurances that Hamas will not be able to rearm if Israel approves a cease-fire. It comes ahead of President-elect Barack Obama's inauguration on Tuesday, and Israeli elections next month.

A senior Israeli official said a vote approving the truce would amount to a "unilateral" cease-fire, though Israeli forces would only leave Gaza after an official declaration that the fighting was over. He spoke on condition of anonymity because he was not authorized to release the information.

A truce would begin a phased process in which Israel halts its military offensive and then gauges the reaction from Hamas militants, the official said. If the militants continue to fire rockets, the assault would resume.

Under the deal, Egypt would shut down weapons smuggling routes with international help, and discussions on opening Gaza's blockaded border crossings would take place at a later date.

U.N. spokeswoman Michele Montas said Ban, who had weekend visits planned to Lebanon and Syria, was considering whether to attend a summit in Cairo Sunday, adding: "There's been no decision yet."

Israeli leaders were also considering whether to attend the summit, the senior Israeli official said.

The diplomatic developments coincided with an easing of violence in Gaza, where Israeli assaults killed 14 Palestinians on Friday, a lower death toll than in recent days. Palestinian medics took advantage of the relative calm, digging out 25 bodies buried under rubble in areas where Israeli forces and militants had clashed.

Palestinians heard dozens of Israeli tanks and other military vehicles roll away from the eastern and southern edges of Gaza City. An Israeli security official said the tanks would redeploy and were not withdrawing. He spoke on condition of anonymity because he was not authorized to speak to the media.

Israeli envoy Amos Gilad returned from Cairo and reported "substantial progress" in truce talks with Egyptian mediators, said a statement from the office of Prime Minister Ehud Olmert.

"I hope we are entering the endgame and that our goal of sustained and durable quiet in the south is about to be attained," Israeli government spokesman Mark Regev said.

In Washington, Secretary of State Condoleezza Rice and Israeli Foreign Minister Tzipi Livni signed an agreement intended to prevent Hamas from smuggling weapons into Gaza if a cease-fire is implemented.

Livni described the deal as "vital ... for a cessation of hostility" and said it was meant "to complement Egyptian actions and to end of the flow of weapons to Gaza."

Earlier, Rice said she hoped European countries would work out similar bilateral agreements with Israel.

"There are a number of conditions that need to be obtained if a cease-fire is to be durable," Rice said. "Among them is to do something about the weapons smuggling and the potential for resupply of Hamas from other places, including from Iran."

The agreement outlines a framework under which the United States commits detection and surveillance equipment, as well as logistical help and training to Israel, Egypt and other nations to be used in monitoring Gaza's land and sea borders.

Rice and State Department spokesman Sean McCormack said Obama and Secretary of State-designate Hillary Rodham Clinton had been consulted on the details of the document, which was concluded after frenetic negotiations to address Israeli concerns that Hamas would use a cease-fire to stock up on weapons.

A diplomat on the U.N. Security Council in New York said he was reasonably optimistic that "we are in the last leg of the negotiations," though some issues remain unresolved.

There were long discussions on border security because the Egyptians don't want any kind of international presence on their side of the border, said the diplomat, who spoke on condition of anonymity because the negotiations are being held behind closed doors.

"Everything has to be on the other side of the border, which means there's a problem of who will be there, not only on behalf of the international community, but also which Palestinians. So it's linked to a potential agreement between Hamas and the Palestinian Authority — so it's linked to other discussions," the diplomat said.

In addition, he said, discussions were under way with the U.S. on technology to help locate and destroy the tunnels Hamas has used to smuggle in weapons.

In Gaza, residents said they would welcome an end to the fighting, but expressed skepticism a cease-fire can hold.

"Everybody wants the world to return to what it was. But I think it's empty words," said Ghadir Mohammed, who was forced to flee her Gaza City home because of the fighting. "Let's assume if Hamas fires a rocket, will they be quiet about it? Israel isn't the kind to be quiet."

Hiba Dahshan from the eastern Gaza City neighborhood of Zeitoun where some of the heaviest fighting has taken place, said: "We are exhausted. We need a solution. Hopefully they'll halt fire."

A resident of the southern Israeli city of Ashkelon, which has been targeted by Hamas rockets, said the army needed to free Israeli soldier Gilad Schalit — abducted by Hamas in 2006 — and be sure there would be quiet in southern Israel before stopping the fight.

"For eight years, they have been shooting at us," said Yigal Hakmon, manager of a convenience store. "We can't stop in the middle. We have to finish. We have to kill all the Hamas people."

Hamas, which has controlled the tiny Mediterranean strip since 2007, has demanded an immediate Israeli withdrawal from Gaza and the opening of blockaded border crossings.

Mohamed Nazzal, a Hamas official based in Damascus, said the Egyptians invited Hamas on Friday for more discussions.

"It is expected that we go to see what is the opinion of the Israelis on the Hamas propositions," Nazzal said.

The Syrian-based Hamas chief Khaled Mashaal took a hard line at a summit of Arab countries in the Qatari capital of Doha, asking them to cut off any ties with Israel.

"We will not accept Israel's conditions for a cease-fire," Mashaal told the summit. He said Hamas demands that "the aggression stop," Israeli troops withdraw and crossings into Gaza open immediately.

Qatar and Mauritania heeded Mashaal's call, suspending political and economic contacts with Israel to protest the fighting. Qatar does not have diplomatic relations with Israel but maintains lower-level ties; Mauritania has full relations, but Israel's embassy in Mauritania was to remain and its ambassador was not being expelled.

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 – 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.

GAZA CITY, Gaza Strip – Thousands of Israeli troops backed by tanks and helicopter gunships surrounded Gaza's largest city and fought militants at close range Sunday, the first full day of an overwhelming ground offensive in the coastal territory.

AP – A Palestinian carries a child into the Shifa hospital in Gaza City, wounded during the Israeli army operation

Israel said it has inflicted a heavy blow against Hamas as it expands a weeklong offensive meant to stop rocket fire on southern Israel. But spiraling civilian casualties among Palestinians fueled an international outcry, even as the U.S. blocked approval of a U.N. Security Council statement Saturday night calling for an immediate cease-fire.

Israel's ground forces moved in after nightfall Saturday following hours of intense, fiery artillery shelling to clear the way, and Hamas warned that its fighters would turn Gaza into an Israeli "graveyard."

Palestinians reported clashes early Monday in eastern Gaza near the border with Israel. Hamas militants fired rocket-propelled grenades and mortars at advancing Israeli tanks. Explosions could be heard in Gaza City as aircraft attacked buildings. There was no immediate word about casualties.

On Sunday, Israeli soldiers fought primarily in open areas in the launching zones used by Gaza's militants to send rockets raining down on Israeli cities. As the troops in three brigade-size formations moved in, residents of those Israeli cities began cautiously emerging from bomb shelters in hopes that the rocket fire would taper off.

Backing up the troops, mobile artillery units fired shells that exploded in veils of white smoke over Gaza's urban skyline. Tanks pushed south of Gaza City as deep as the abandoned settlement of Netzarim, which Israel left along with other communities when it pulled out of Gaza in 2005.

That effectively cut off Gaza City, the territory's largest population center with some 400,000 residents, from the rest of Gaza to the south.

Israel's military chief said Hamas fighters were trying to draw soldiers deeper into Gaza's sprawling, densely packed urban areas, where the military said militants were shielding themselves behind civilians.

"You entered like rats," Hamas spokesman Ismail Radwan told Israeli soldiers in a statement on Hamas' Al Aqsa TV. "Gaza will be a graveyard for you, God willing," he said.

Israeli forces have not yet entered urban areas, said Brig. Gen. Avi Benayahu, the chief army spokesman. He warned, however, that the operation was not a "school trip" and would be long and demanding.

The ground invasion risks turning into intense urban combat, with house-to-house fighting, sniper fire and booby-traps. Hamas is believed to have some 20,000 gunmen and has had time to prepare.

To guard against hidden explosives, Israel's ground forces moved through fields and orchards with bomb-sniffing dogs.

Since the ground assault began, 64 Palestinian civilians have been killed, said Dr. Moaiya Hassanain, a Health Ministry official. The new deaths brought the death toll in the Gaza Strip to more than 512 since Dec. 27. The tally is based on figures from the U.N. and Palestinian health officials as well as a count by The Associated Press.

Five Israelis have been killed since the offensive began. One soldier has been killed in the ground operation and about 40 were wounded, some of them in heavy exchanges of fire near the militant stronghold of Jebaliya, a town on Gaza City's northern outskirts, the army said. Heavy Israeli casualties could undermine what has so far been overwhelming public support for the operation.

At one hospital in the northern village of Beit Lahiya, medics carrying three injured children in their arms rushed them to treatment. One of the children had a blood-soaked bandage wrapped around his head and covering his eyes.

An Israeli shell also struck an ambulance in the town, killing a paramedic, said Marwan Abu Ras, a hospital administrator. The relief organization Oxfam, which said the ambulance belonged to a partner organization, al-Awda Hospital, confirmed the shelling.

An airstrike hit another ambulance belonging to the Hamas-run Health Ministry in Gaza City, killing three other paramedics, said medic Jamal Hawajiri. That ambulance crew was driving to a Hamas training site where there were reports of wounded.

An Israeli army spokesman said he had no information on the incidents.

The Israeli army said it had killed dozens of armed Hamas gunmen, but Gaza officials could confirm only a handful of dead fighters — in part because rescue teams could not reach the battle zones.

Condemnation of Israel's ground operation poured in from the Middle East and Europe.

"The violence has to stop," said EU External Relations Commissioner Benita Ferrero-Waldner.

French President Nicolas Sarkozy scheduled talks Monday with Israeli and Palestinian leaders. While blaming Hamas for causing Palestinian suffering with rocket fire that led to the Israeli offensive, Sarkozy has condemned Israel's use of ground troops, reflecting general world opinion. Sarkozy and other diplomats making their way to the region are expected to press hard for a cease-fire.

Israel has four main demands: and end to Gaza rocket fire, a halt to Palestinian attacks, international supervision of a truce and an agreement to stop Hamas from re-arming. Hamas demands a cessation of Israeli attacks and opening of vital Gaza-Israel cargo crossings, Gaza's main lifeline.

U.S. officials maintained their firm support for Israel and squarely blamed Hamas.

Vice President Dick Cheney said Israel "didn't seek clearance or approval from us" before pushing into Gaza.

Sens. Harry Reid and Dick Durbin — the top two Democrats in the chamber — and Senate Republican leader Mitch McConnell all described Israel's actions as understandable.

"I think what the Israelis are doing is very important," Reid said. "I think this terrorist organization, Hamas, has got to be put away. They've got to come to their senses."

Israeli President Shimon Peres said that Israel had to push forward and that a cease-fire was pointless without a halt to Hamas rocket fire.

"Well, clearly, if there is somebody (who) can stop terror with a different strategy, we shall accept it," he said on ABC's "This Week."

"We shall not accept the idea that Hamas will continue to fire and we shall declare a cease-fire. It does not make any sense."

Palestinians said the Israeli military broke into broadcasts on the Hamas TV channel, Al Aqsa, appealing to Palestinians not to agree to serve as human shields for the militants. The message read, "Israel is acting only against Hamas and has no interest in harming you."

The ground operation is the second phase in an offensive that began as a weeklong aerial onslaught aimed at halting Hamas rocket fire that has reached deeper and deeper into Israel, threatening major cities and one-eighth of Israel's population of 7 million.

More than 45 rockets and mortar shells fell in Israel on Sunday morning, sending residents scrambling for bomb shelters. Four Israelis were lightly wounded.

In Gaza City, civilians cowered inside as battles raged, while terrified residents in other areas fled in fear. In the southern town of Rafah, one man loaded a donkey cart with mattresses and blankets preparing to flee.

Lubna Karam, 28, said she and the other nine members of her family spent the night huddled in the hallway of their Gaza City home. The windows of the house were blown out days earlier in an Israeli airstrike, and the family has been without electricity for a week, surviving without heat and eating cold food.

"We keep hearing the sounds of airplanes and we don't know if we'll live until tomorrow or not," she said.

Severe damage to Gaza's phone network was pushing the territory closer to complete isolation. The Palestinian phone company Paltel Group said 90 percent of Gaza's cellular service was down, as well as many landlines, because of frequent power cuts and the inability of technicians to reach work sites.

In his first public comments on the operation, Israeli Prime Minister Ehud Olmert told his Cabinet Sunday that Israel could not allow its civilians to continue to be targeted by rockets from Gaza.

"This operation was unavoidable," he said.

Military intelligence chief Maj. Gen. Amos Yadlin told the Cabinet Hamas was using mosques, public institutions and private houses as ammunition stores, Cabinet secretary Oved Yehezkel told reporters.

Israel approved the mobilization of thousands more reservists in addition to tens of thousands called up on Saturday. Defense officials said the extra forces could enable a far broader ground offensive.

The troops could also be used in the event Palestinian militants in the West Bank or Hezbollah guerrillas in Lebanon launch attacks, as Hezbollah did in 2006 when Israel was in the midst of a large operation in Gaza.

GAZA CITY, Gaza Strip – An Israeli warplane dropped a 2,000-pound bomb on the home of one of Hamas' top five decision-makers Thursday, instantly killing him and 18 others, while the Israeli army said troops massed on the Gaza border were ready for any order to invade.

The airstrike on Nizar Rayan was the first that succeeded in killing a member of Hamas' highest echelon since Israel began its offensive Saturday. The 49-year-old professor of Islamic law was known for personally participating in clashes with Israeli forces and for sending one of his sons on a 2001 suicide mission that killed two Israelis.

The attacks continued Friday. Before dawn, Israeli aircraft hit 15 houses belonging to Hamas militants, Palestinians said. They said the Israelis either warned nearby residents by phone or fired a warning missile to reduce civilian casualties. Twelve people were hurt in the attacks, hospital officials said.

Even as it pursued its bombing campaign, Israel kept the way open for intense efforts by leaders in the Middle East and Europe to arrange a cease-fire. Israel said it would consider a halt to fighting if international monitors were brought in to track compliance with any truce.

Adding to the urgency of the diplomatic maneuvering, the Israeli military said its preparations for a possible ground assault were complete and that troops stood ready to cross the border if the air operation to stamp out Hamas rocket fire needed to be expanded.

Soldiers massed along the Gaza frontier said they were eager to join the fight, and some even cheered as they heard thunderous airstrikes in the distance.

The hit on Rayan's home obliterated the four-story apartment building and peeled off the walls of others around it, creating a field of rubble in the crowded town of Jebaliya in the northern Gaza Strip. Mounds of debris thrown up by the blast swallowed up cars.

Eighteen other people, including all four of Rayan's wives and nine of his 12 children, also were killed, Palestinian health officials said. A man cradled the burned, limp body of a child he pulled from the rubble.

The house was one of five bombed Thursday, among more than 20 targets altogether. Warplanes shredded the houses, taking off walls and roofs and leaving behind eerie, dollhouse-like views into rooms that still contained furniture.

Israel's military, which has said the homes of Hamas leaders are being used to store missiles and other weapons, said the attack on Rayan's house triggered secondary explosions from the arms stockpiled there.

Seven other Palestinians were killed in airstrikes Thursday and one died of earlier injuries.

Israel has targeted Hamas leaders many times in the past, and the current leadership went into hiding at the start of the offensive. Rayan, however, was known for openly defying Israel and in the past had led crowds to the homes of wanted Hamas figures — as if daring Israel to strike and risk the lives of civilians.

Residents said he openly went to a nearby mosque Thursday morning to pray.

In his last interview, recorded with Hamas TV on Wednesday, Rayan was as defiant as ever about confronting the Israeli military.

"Oh fighters, know that you will be victorious," he said. "God promises us either victory or martyrdom. God is greater than they are, God is greater than their planes, God is greater than their rockets."

The military said it had information that there was a tunnel beneath Rayan's home for use as an escape route.

Israel seemed determined to press ahead with airstrikes on Hamas houses. It also has been targeting buildings used by the territory's Hamas government — emptied days ago by evacuations — as well as rocket-launching sites and smuggling tunnels along the border with Egypt.

"We are trying to hit everybody who is a leader of the organization, and today we hit one of their leaders," Israeli Vice Premier Haim Ramon said in a television interview.

More than 400 Gazans had been killed and some 1,700 wounded since Israel embarked on its aerial campaign, Gaza health officials said. The United Nations has said the death toll includes more than 60 civilians, 34 of them children.

One of them, 11-year-old Ismail Hamdan, was buried Thursday after dying of wounds suffered from an airstrike Tuesday that killed two of his sisters, Haya, 4, and Lama, 12. His body was wrapped in a Palestinian flag and his battered face was still bandaged as he was carried above a crowd of mourners.

Since Saturday, three Israeli civilians and one soldier have also died in rocket attacks that have reached deeper into Israel than ever before, bringing more than a tenth of Israel's population of 7 million within rocket range.

The bombing campaign has worsened an already hard life for Gaza's mostly poor population of 1.5 million. On Thursday, hundreds of people stood in long, snaking lines across the territory waiting to buy bread.

Israel launched the offensive Saturday after more than a week of intense Palestinian rocket fire that followed the expiration of a six-month truce, which Hamas refused to extend because Israel kept up its blockade of Gaza.

So far, the campaign has been conducted largely from the air. But a military spokeswoman, Maj. Avital Leibovich, said preparations for a ground operation were complete.

"The infantry, the artillery and other forces are ready. They're around the Gaza Strip, waiting for any calls to go inside," Leibovich said.

Thousands of soldiers waited along the border, resting among tanks, armored personnel carriers and howitzers. The troops watched warplanes and attack helicopters flying into Gaza, cheering each time they heard the explosion of an airstrike.

One soldier, who can be identified under military rules only as Sgt. Yaniv, said he was eager to go in. "I am going crazy here watching all this. I want to do my part as well," he said.

Hamas promised to put up a fight if Israeli land forces invaded.

"We are waiting for you to enter Gaza to kill you or make you into Schalits," the group said, referring to Israeli Sgt. Gilad Schalit, who was captured in a cross-border raid by Hamas-affiliated militants 2 1/2 years ago and remains in captivity in Gaza.

Israel's bruising campaign has not deterred Hamas from assaulting Israel. According to the military, militants fired more than 30 rockets into southern Israel during the day.

No injuries were reported, but an eight-story apartment building in Ashdod, 23 miles from Gaza, was hit. Panicked residents ran through a debris-strewn street.

Earlier this week, Israeli Prime Minister Ehud Olmert rebuffed a French proposal for a two-day suspension of hostilities to allow for the delivery of humanitarian supplies. Israel has been allowing trucked relief supplies to enter Gaza. Ninety aid trucks crossed the border Thursday.

Still, Olmert seemed to be looking for a diplomatic way out, telling Secretary of State Condoleezza Rice and other world leaders that Israel would accept a truce only if international monitors took responsibility for enforcing it, government officials said. They spoke on condition of anonymity because the talks were confidential.

A Turkish truce proposal included a call for such monitors.

Foreign Minister Tzipi Livni, speaking to reporters during a visit to Paris for meetings with French officials, expressed skepticism about the benefits of a cease-fire. She said Hamas used the lull during the six-month truce that expired last month to build up its arsenal of weapons.

"Our experience from the past is that even when we accept something in order to have a peaceful period of time, they abuse it in order to get stronger and to attack Israel later on," Livni said.

Egypt's foreign minister said Hamas must ensure that rocket fire stops in any truce deal, and he criticized the Palestinian militants for giving Israel an "opportunity on a golden platter" to launch the offensive.

Gaza has been under Hamas rule since the group's fighters overran it in June 2007. The West Bank has remained under the control of moderate Palestinian President Mahmoud Abbas, who has been negotiating peace with Israel for more than a year but has no influence over Hamas. Bringing in truce monitors would require cooperation between the fiercely antagonistic Palestinian factions.

An Abbas confidant said the Palestinian president supported the notion of international involvement. "We are asking for a cease-fire and an international presence to monitor Israel's commitment to it," Nabil Abu Rdeneh said.

World leaders have not been deterred by the initial rejections by Israel and Hamas of truce efforts, and next week French President Nicolas Sarkozy plans a whirlwind trip around the region.

GAZA CITY, Gaza Strip – Israel, under international pressure, is considering a 48-hour halt to its punishing four-day air campaign on Hamas targets in Gaza to see if Palestinian militants will stop their rocket attacks on southern Israel, Israeli officials said Tuesday. Any offer would be coupled with a threat to send in ground troops if the rocket fire continues.

AP – A Palestinian woman checks the damage to her house following an Israeli air strike in Gaza City, Tuesday,

Prime Minister Ehud Olmert discussed the proposal — floated by France's foreign minister — and other possible next steps with his foreign and defense ministers, Israeli officials said, speaking on condition of anonymity because they were not supposed to make the information public.

President George W. Bush and Secretary of State Condoleezza Rice called leaders in the Middle East to press for a durable solution beyond any immediate truce.

Play Video Reuters – Calls for truce as Gaza deaths rise

And members of the Quartet of world powers trying to promote Mideast peace concluded a conference call with an appeal for an immediate cease-fire. The Quartet powers are the United States, the United Nations, the European Union and Russia.

The European Union itself late Tuesday also urged an immediate truce and for Israel to reopen borders to allow vital supplies to reach Gazans. The Paris statement by the 27-member bloc avoided blaming either side for the current fighting.

In its Tuesday night meeting, Israel's leadership trio stepped up preparations for a ground offensive, conducting a telephone survey among Cabinet ministers on a plan to call up an additional 2,500 reserve soldiers, if required. Earlier this week, the Cabinet authorized a callup of 6,700 soldiers.

After the four-hour meeting, Olmert's office issued a statement early Wednesday saying no details of the discussion would be made public because of the sensitivity of the subject matter.

But Israeli officials, speaking on condition of anonymity because they weren't authorized to release information on the meeting, said the leaders wanted Hamas to agree to stop the rocket fire before Israel considers a truce.

And even amid talk of a truce, Israeli warplanes continued to unload bombs on targets in Gaza. Powerful airstrikes caused Gaza City's high-rise apartment buildings to sway and showered streets with broken glass and pulverized concrete. Israel's ground forces on Gaza's border also used artillery for the first time.

Hamas kept up its rocket barrages, which have killed four Israelis since the weekend, and sent many more in running for bomb shelters — some of them in cities under threat of attack for the first time, as the range of the rockets grows.

A medium-range rocket hit the city of Beersheba for the first time ever, zooming 28 miles deep into Israel and slamming into an empty kindergarten. A second rocket landed in an open area near the desert city, Israel's fifth-largest. The military said later it successfully struck the group that launched those rockets.

A pattern of daytime lulls and nighttime spikes in rocket fire appeared to be emerging as militants found safer launch cover in darkness.

Four days into a campaign that has killed 374 Palestinians and prompted Arab and international condemnation, a diplomatic push to end the fighting gathered pace.

In two phone calls to Defense Minister Ehud Barak on Monday and Tuesday, French Foreign Minister Bernard Kouchner appealed to him to consider a truce to allow time for humanitarian relief supplies to enter the beleaguered Gaza Strip, two senior officials in Barak's office said.

Foreign Minister Tzipi Livni was expected to travel Thursday to Paris for talks with French President Nicolas Sarkozy, who has put his growing international stature to use in other conflict zones, most recently to help halt fighting between Russia and Georgia in August.

Israeli media reported that Sarkozy would also travel to Jerusalem Monday for talks with the Israeli and Palestinian leaders.

A Hamas spokesman said any halt to militant rocket and mortar fire would require an end to Israel's crippling blockade of the Gaza Strip. "If they halt the aggression and the blockade, then Hamas will study these suggestions," said Mushir Masri.

Any cease-fire between Israel and Hamas would face questions about its long-term viability. In the past, Hamas has been unable or unwilling to rein in all the militants, some of which belong to different factions. Israel has angered the Palestinians by continuing to target its leaders and by maintaining a blockade of the Gaza Strip.

"It's certainly difficult for Hamas because, having witnessed the losses that they have just suffered on large scale, their credibility is on the line and they're not going to easily agree to a cease-fire that goes back to the conditions that prevailed before, after all these losses," said Shibley Telhami, professor of political science at the University of Maryland and senior fellow at the Brookings Institute. "So, we're likely to see more bloodshed, and I think that is where we are in a way, events on the ground are going to dictate."

Israel's military, meanwhile, pressed on, sending warplanes to strike a Gaza government complex that includes the ministries of interior, foreign affairs and justice. Bombs ripped the tops and sides from buildings that had already been evacuated and left fires blazing in upper floors.

It was the largest government target hit so far and involved the largest number of bombs dropped in a single strike — at least 16 in all.

The airstrikes have sent the people of densely populated Gaza on a zigzagging desperate search for safer ground — hard to find with no way out of the blockaded territory.

"I don't know what's safe anymore," said university student Rasha Khaldeh of Gaza City. She fled her home, fearing Israel would target her Hamas neighbors, then had to leave her uncle's house because of nearby shelling. She listens intently for the approach of pilotless Israeli drones.

After nightfall, Israel destroyed 40 tunnels under the sealed Gaza-Egypt border in another attempt to cut the vital lifeline that supplies Gaza with both commercial goods and weapons for Hamas and other militant groups.

Israel kept up the attack on the tunnels early Wednesday, as other aircraft hit Hamas positions in Gaza City.

Israel's military said it hit 31 targets on Tuesday, including a Cabinet building, rocket-launching sites, and places were missiles were being built. Some of the hits on sites with weapons stockpiles triggered secondary explosions.

The question still hanging over the Israeli operation is how it can halt rocket fire. Israel has never found a military solution to the barrage of missiles. The "Iron Dome," a system to guard against short-range missiles, will take years to build.

Beyond delivering Hamas a deep blow and protecting border communities, the assault's broader objectives remained cloudy. Israeli President Shimon Peres acknowledged the challenge, saying the operation was unavoidable but more difficult than many people anticipated.

"War against terrorists is harder in some aspects than fighting armies," Peres said.

Hamas also said it would take more to cripple it.

A spokesman for Hamas' military wing, Abu Obeida, said the group remained strong, and he vowed to fight on as long as Israel continues its airstrikes. He noted that even while under heavy airstrikes, militants had fired rockets that reached Israeli towns farther from Gaza than ever. "Rockets will be on your daily agenda," he said in a message to Israelis.

And if there's a ground invasion, he promised worse: "If you enter Gaza, the children will collect your flesh and the remains of your tanks which will be spread out through the streets."

The offensive came shortly after a rocky, six-month truce expired.

Emad Falluji, a former Hamas leader working at a Gaza-based think tank, said he believes Hamas had wanted to renew the truce but felt humiliated by Israel's decision to maintain a tight blockade on Gaza.

"Israel didn't want to give Hamas anything in return for the cease-fire, which was effectively free," he said.

Egypt, which has been blockading Gaza from its southern end, has come under pressure from the rest of the Arab world to reopen its border with the territory because of the Israeli campaign. Egypt has pried open the border to let in some of Gaza's wounded and to allow some humanitarian supplies into the territory. But it quickly sealed the border when Gazans tried to push through forcefully.

In a televised speech Tuesday, Egyptian President Hosni Mubarak responded to critics, including the leader of the Lebanese militia Hezbollah, who have accused him of collaborating with Israel.

"We tell anybody who seeks political profits on the account of the Palestinian people: The Palestinian blood is not cheap," he said, describing such comments as "exploiting the blood of the Palestinians."

Mubarak said his country would not throw open the border crossing unless Palestinian President Mahmoud Abbas — a Hamas rival — regains control of the border post. Mubarak has been rattled by the presence of a neighboring Islamic ministate in Gaza, fearing it would fuel more Islamic dissidence in Egypt.

Most of the Palestinians killed since Saturday were members of Hamas security forces but the number included at least 64 civilians, according to U.N. figures. Among those killed were two sisters, Haya and Lama Hamdan, ages 4 and 12, who died in an airstrike on a rocket squad in northern Gaza on Tuesday.

Throughout the offensive, Israel's military has released video taken by hovering drone aircraft showing its missiles and bombs hurtling into Gaza targets, including one on Tuesday that sent about a half-dozen bombs simultaneously into a smuggling tunnel under the Gaza-Egypt border.

During brief lulls between airstrikes, Gazans tentatively ventured into the streets to buy goods and collect belongings from homes they had abandoned after Israel's aerial onslaught began Saturday.

The campaign has brought a new reality to southern Israel, too, where one-tenth of the country's population of 7 million has suddenly found itself within rocket range.

"It's very scary," said Yaacov Pardida, a 55-year-old resident of Ashdod, southern Israel's largest city, which was hit Monday. "I never imagined that this could happen, that they could reach us here."

CRAWFORD, Texas – The deaths of hundreds of Palestinians in Israel's deadliest-ever air assault on Hamas further complicate President-elect Barack Obama's challenge to achieve a Middle East peace — something that eluded both the Bush and Clinton administrations.

AFP – US President-elect Barack Obama (2ndR) departs a gym after his morning work out, taking time to talk

The Bush administration has blamed the renewed violence on the militant Islamic group Hamas, which controls the Gaza Strip, saying it broke a cease-fire by firing rockets and mortars deep into Israeli territory. The Arab world, however, has reacted with rage to the aggressive Israeli counterattacks, which have left at least 290 Palestinians dead and more than 600 wounded.

It's unclear whether Obama will be as supportive of Israel as President George W. Bush has been.

David Axelrod, senior adviser to Obama, chose his words carefully Sunday, saying the president-elect would honor the "important bond" between the United States and Israel.

"He wants to be a constructive force in helping to bring about the peace and security that both the Israelis and the Palestinians want and deserve," Axelrod said on CBS' "Face the Nation." "Obviously, this situation has become even more complicated in the last couple of days and weeks. As Hamas began its shelling, Israel responded. But it's something that he's committed to."

Pressed about how much support Obama will offer Israel, Axelrod said: "He's going to work closely with the Israelis. They're a great ally of ours, the most important ally in the region. ... But he will do so in a way that will promote the cause of peace, and work closely with the Israelis and the Palestinians on that — toward that objective."

Israel had been carrying out its attack exclusively from the air, but the Israeli Cabinet has authorized the military to call up 6,500 reserve soldiers for a possible ground invasion.

"I'm not sure it's a good idea," Sen. Sherrod Brown, D-Ohio, said Sunday on ABC's "This Week." "I mean, Israel certainly has the right to self-defense, of course. Hamas has not recognized Israel's right to exist. ... But I'm hopeful that as this transition comes, as we look to January, that strong presidential leadership can make a difference here."

Jon Alterman, head of the Middle East program at the Center for Strategic and International Studies in Washington, speculated that Israeli leaders synchronized their retaliatory attacks to political calendars in both Israel and the U.S. More moderate politicians running in the Feb. 10 national election needed to appear strong against Hamas, and it was perhaps better to strike before Bush left office on Jan. 20 because they weren't as sure what Obama's reaction would be.

"I think Obama will be supportive of Israel, but will bring a little more skepticism to it," Alterman said. "I think Obama will start from premise that Israel is an ally, but that we have to look at this fresh."

The White House was mum about the situation in Gaza on Sunday after speaking out strongly on Saturday. The Bush administration condemned the repeated rocket and mortar attacks against Israel and said it held Hamas responsible for breaking a cease-fire. The U.S. implored Israel to avoid civilian casualties and asked all concerned to address the urgent humanitarian needs of innocent people in Gaza.

Bush, who is staying at his Texas ranch, spoke on the phone with national security adviser Stephen Hadley to receive an update on the situation and was being kept abreast of developments throughout the day, said Gordon Johndroe, a presidential spokesman. He said Bush would receive an intelligence briefing via a secured video hookup at the ranch early Monday morning and would be briefed then on any overnight developments.

According to an aide on Obama's transition team, the president-elect, who is in Hawaii, continues to closely monitor global events, including the situation in Gaza. He had an intelligence briefing Sunday and plans to talk with his incoming national security adviser, Gen. James Jones, and Sen. Hillary Rodham Clinton, his nominee for secretary of state.

The aide said Obama appreciates the information the Bush administration is sharing with him. The aide requested anonymity because the Obama team is refraining from comment, saying the U.S. has only one president at a time.

When Hamas took control of Gaza in June 2007, it fractured governance of the Palestinian territory. The other part, the West Bank, is controlled by moderate Palestinian President Mahmoud Abbas. The renewed violence increases the volatility of an already unstable area.

"It undoubtedly will have a very severe impact on wherever the next administration would like to go," Ed Abington, a former American diplomat who advises Abbas, said in an interview. "You can't kill almost 300 Palestinians and wound 600 to 700 and not have repercussions in the region."

"I don't quite know where the Israelis want to end up," he added, saying that trying to bomb Hamas into submission only rekindles radicalization. Abington said Israel's retaliatory attacks weaken, not strengthen, the stature of Abbas, who is backed by the West.

Alterman said, however, that if Hamas is weakened by the bombings in Gaza, Abbas' position could be emboldened. "It's possible to imagine that he could emerge as some sort of broker who saves Gaza from an Israeli onslaught," Alterman said.