Israeli troops fought fierce gun battles with Hamas fighters today, keeping military pressure on the Islamist group while avoiding all-out urban warfare that would complicate ongoing diplomatic efforts to end the Gaza war.
Medical officials said the Palestinian death toll in the offensive which began 17 days ago, had risen past 900 and included at least 380 civilians. Israel says 13 Israelis -- three civilians hit by rockets and 10 soldiers -- have died.
An Israeli military spokesman said army reservists had been thrown into the campaign that Israel launched with the declared aim of ending cross-border rocket attacks from the Hamas-ruled territory to its south.
But Israeli forces were still holding back from a threatened third stage of their deadliest assault on Palestinian militants in decades -- a push into the city of Gaza and other urban areas to add more punch to an air campaign and ground offensive.
Israeli foreign minister Tzipi Livni, a candidate for prime minister in a February 10th election, said the surprise bombing of the Gaza Strip at the start of operations on December 27tgh and an armoured thrust a week later had "restored Israel's deterrence".
Morning radio programmes in Israel, however, continued to be interrupted by announcements of "Colour Red" alerts, heralding rocket attacks on towns where residents have only seconds to find shelter before salvoes hit. Ten rockets landed in the first half of the day, the army said. No one was hurt.
Israeli soldiers battled Hamas militants east and north of the rubble-strewn city of Gaza in what residents called ferocious fighting.
The Israeli military said its aircraft carried out more than 25 attacks, fewer than on many previous days. They struck Hamas gunmen, weapons caches, rocket and mortar launching positions and a smuggling tunnel under Gaza's border with Egypt, it said.
"Ground forces were involved in a number of incident in which gunmen were hit," the army said in a statement.
Medical workers said Israeli forces killed eight Palestinians, including at least four civilians, in today's violence.
In an interview on Israeli Army Radio, Ms Livni gave no indication when the assaults might end.
Political sources said Ms Livni, chairman of the ruling Kadima party, and her main coalition partner defence minister Ehud Barak, head of centre-left Labour, wanted to halt the operation in the Hamas-ruled territory as soon as possible.
But the sources said outgoing prime minister Ehud Olmert, who resigned as Kadima chief in September, disagreed and planned to present the issue in a cabinet forum where he has support.
The Palestinian death toll since Israel's "Operation Cast Lead" began stood at 908, Gaza medical officials said. About 3,600 Palestinians have been wounded.
The health minister in the Hamas-run government in Gaza, Bassem Naeem, told reporters that 42 per cent of those killed -- or about 380 -- were women and children. Israel, which says it has killed "hundreds" of fighters, has questioned civilian casualty figures from Gaza but has not offered its own estimate.
Journalists covering sites of attacks and hospital facilities have seen dozens of bodies of women and children. Israel has accused Hamas, operating in densely populated areas, of using civilians as human shields.
"Every child and adult not involved with terror who has been caught as a casualty of our military efforts is a victim for which we apologise, which we want to prevent,"Mr Olmert said today.
Egypt's state news agency MENA said more talks in Cairo with a Hamas delegation on an Egyptian plan for a ceasefire were planned for Monday after "positive" discussions a day earlier.
Hamas official Osama Hamdan said some delegates had returned to Damascus for consultations with the group's leadership.
Israel, which rejected a UN ceasefire resolution last week as unworkable, wants a halt to rocket attacks and measures to stop Hamas from rearming via the tunnels under the Egypt-Gaza border, in an area known as the Philadelphi corridor.
Western and Israeli officials said diplomats were discussing an internationally-assisted technical monitoring system to help Egypt stop weapons smuggling and intercept rocket shipments.
Egypt, concerned for its sovereignty, opposes stationing an international force on its side of the frontier.
International Middle East envoy Tony Blair said after talks with Egyptian president Hosni Mubarak in Egypt today that "the elements of an agreement of the immediate ceasefire are there and are now being worked on very hard in great detail.
"This is a sensitive and delicate time in the negotiation but I hope they will bear fruit and I hope so soon. I hope we can achieve it (the ceasefire) within the coming days," Blair told reporters.
Hamas leader Khaled Meshaal has said the group would not consider a ceasefire until Israel ended its air, sea and ground assault and lifted its blockade of the Gaza Strip.
Israeli warplanes have repeatedly bombed the Philadelphi corridor along Gaza's 14-km border with Egypt, sometimes using "bunker buster" munitions that explode underground and cause shockwaves to try to collapse the tunnels.
Western diplomats, speaking on condition of anonymity, described a ground operation to retake the corridor and parts of the town of Rafah as one of Israel's leading "third phase" options if talks over a ceasefire founder.
A ground assault would allow Israel to use bulldozers and sonar equipment to root out tunnels that have yet to be destroyed with air power alone.
Local Palestinian tunnel operators estimated that several hundred of the secret passages have been disabled but that many hundreds of others remained intact.
Reuters