Israeli forces thrust deep into central Gaza today, killing a senior Hamas leader, in what may be a final push against the Islamist group before agreeing to a ceasefire in the 20-day-old war.
Diplomatic sources said Israeli leaders were studying Hamas's terms for a truce. They included a year-long, renewable ceasefire, the withdrawal of all Israel forces within 5 to 7 days, and the immediate opening of all Gaza border crossings, backed by international guarantees they would stay open.
UN secretary general Ban Ki-moon, speaking after talks in Jerusalem with Israeli leaders, said: "I understand today the Israeli government will make an important decision on a ceasefire. I hope that decision will be the right one."
In a step to bring a deal closer, the United States told Israel it would be prepared to offer security guarantees.
The Palestinian death toll from the air-and-ground offensive was at least 1,095 and over 5,000 are wounded, according to the Hamas-run Health Ministry in Gaza. A Palestinian rights group said at least 698 of the dead were civilians.
Thirteen Israelis have been killed, including 10 soldiers and three civilians hit by Hamas rocket fire.
In Damascus, the exiled leader of Hamas, Khaled Meshaal, reiterated his group's demands for a truce with Israel in the Gaza Strip, saying any ceasefire deal had to meet them.
"First, the aggression must stop; second, the Israeli forces must withdraw from Gaza ... immediately, of course; thirdly, the siege must be lifted and fourth we want all crossing-points (into Gaza) reopened, first of which is Rafah (Egypt)."
An Israeli air strike on a house in Jabalya refugee camp killed Hamas Interior Minister Saeed Seyyam, his son, brother and half a dozen others, medical workers said. Seyyam oversaw 13,000 Hamas police and security men.
At least 15 Palestinians were killed in Israeli attacks in Gaza city during the day, medical officials said. Israeli fire also hit a UN compound, a hospital and a TV office.
Israeli prime minister Ehud Olmert's office said US secretary of state Condoleezza Rice telephoned him to say Washington would sign an agreement on measures to stop Hamas from smuggling in fresh arms via Egypt after a ceasefire.
"The secretary of state noted that the United States would be prepared to assist in solving the issue of smuggling," it said in a statement.
Israel insists Hamas must no longer be able to smuggle in weapons through tunnels under the Gaza-Egypt border, and must end its rocket attacks on its southern towns.
About 25 rockets fired from the Gaza Strip hit southern Israel today, wounding six people, police said.
The United Nations Relief and Works Agency (UNRWA) said its compound, where up to 700 Palestinians were sheltering, was struck twice by Israeli fire and three staff members were injured. Thick smoke rose from its food and fuel depot.
Ban ki-Moon called it an "outrage" and Mr Olmert apologised to him, but said the shelling was prompted by fire from Palestinian gunmen at the compound.
No one was reported hurt at the hospital, where its administrative offices were set ablaze and dozens of patients moved in panic to the ground floor, seeking safety.
A rocket hit the downtown Al-Shurouq Tower, where the Reuters bureau and other media offices are located. Gulf-based Abu Dhabi Television said it believed its two journalists were targeted by an Israeli aircraft as they filmed from the office.
The Israeli military had no comment throughout the day on the attacks on the hospital and media offices.
Dozens of terrified residents of neighbourhoods near the Gaza city centre fled on foot. Thousands more huddled in their homes as explosions tore through rubble-strewn streets.
"It is a catastrophe," one woman said, walking quickly away from the area and carrying a child in her arms as two other children ran behind her to keep up.
"We took our money and passports. We have to carry some identification with us in case we get killed," she said. "Hamas can claim victory if it wants but we just need this bloodshed to end."
A senior Western diplomat said Israel appeared to be trying to make last-minute gains on the ground before a truce could be imposed.
"It's a classic Israeli strategy," the diplomat said.
Reuters