Israeli forces squeeze Gaza

GAZA (Reuters) - Israel's senior general said more work lay ahead in the 18-day offensive against Hamas in the Gaza Strip on Tuesday and Israeli tanks and troops edged closer to the heart of the city of Gaza.

The Palestinian death toll rose to 971, Gaza's Hamas-run Health Ministry said, counting some 400 women and children among those killed. Israel says 10 Israeli soldiers and three civilians hit by Hamas rockets have died.

The chief U.N. aid official for Gaza appealed to the international community to protect Gaza's civilians, saying nowhere in the territory of 1.5 million people was safe any longer with the conflict becoming "a test of our humanity."

"All the people, the first thing they say to me and the last thing they say to me is 'Please, we need protection, nowhere is safe," John Ging, director of operations for the U.N. Relief and Works Agency, told reporters in Geneva by videolink.

Explosions and heavy machinegun fire echoed across Gaza, a city of 500,000, after Israeli tanks moved nearer to its densely populated downtown area but did not enter, residents said. The tanks appeared to be testing how the militants reacted.

The sporadic explosions could be heard late into the night across the Gaza Strip although there was no immediate word of more casualties.

Talat Jad, a 30-year-old resident of Tel al-Hawa suburb, said he and 15 members of his family had gathered in one room of their house, too frightened to look out of the window.

"We even silenced our mobile phones because we were afraid the soldiers in the tanks could hear them," Jad said.

Medical workers said 23 Palestinian fighters, most of them members of the Islamist Hamas group, and seven civilians were killed in the latest fighting.

In Cairo, a Hamas delegation resumed talks on a cease-fire plan proposed by Egypt, which borders the Gaza Strip and Israel and has made peace with the Jewish state.

Israeli aircraft attacked 60 targets, including tunnels used by militants to bring arms across the border from Egypt. Two rockets hit Beersheba in southern Israel without causing casualties.

"We have achieved a lot in hitting Hamas and its infrastructure, its rule and its armed wing, but there is still work ahead," Lieutenant-General Gabi Ashkenazi, chief of staff of Israel's armed forces, told a parliamentary committee.

Ashkenazi said Israeli aircraft had carried out more than 2,300 strikes since the offensive -- Israel's deadliest against Palestinians in decades -- was launched on December 27.

U.N. Secretary-General Ban Ki-moon was heading to the region for a week of talks with leaders in Egypt, Israel, Jordan and Syria aimed at ending the bloodshed.

British Prime Minister Gordon Brown pressed leaders of Israel and Egypt for moves towards a full and sustainable cease-fire, his office said. Brown "has been deeply troubled by the scenes of terrible suffering," it said.

Human rights groups have reported shortages of vital supplies, including water, in the Gaza Strip. A fuel shortage has brought frequent power blackouts.

Israel has permitted almost daily truck shipments of food and medicine. But Human Rights Watch said Israel's daily 3-hour break in attacks to facilitate the supply of humanitarian aid to Gazans was "woefully insufficient."

URBAN WARFARE

Political sources said Israeli Prime Minister Ehud Olmert, Defence Minister Ehud Barak and Foreign Minister Tzipi Livni decided late on Monday against ordering troops in the next two or three days to engage in all-out urban warfare.

Opening a "Phase 3" of the offensive would likely complicate truce efforts, lead to intense street fighting and could cause heavy casualties on both sides, a politically risky move less than a month before Israel's parliamentary election.

Barak said in broadcast remarks that Israel had "respectfully" heard Ban's appeal and was monitoring Egypt's cease-fire mediation, but it would continue to hit Hamas while diplomatic efforts were under way.

A statement from his office said Barak had updated U.S. Defence Secretary Robert Gates on the latest developments.

Hamas says Israel must pull back all its troops under a cease-fire and end the blockade of the Gaza Strip that it tightened after the group seized the coastal enclave from forces loyal to Palestinian President Mahmoud Abbas in 2007.

Hamas official Moussa Abu Marzouq told Al Jazeera television it had "substantial observations" about the cease-fire plan.

Israel has rebuffed as "unworkable" a U.N. Security Council cease-fire resolution last week and said a truce must ensure Hamas cannot rearm through tunnels under the Gaza-Egypt border.

Ashkenazi said Israeli warplanes had bombed "all of the known tunnels" during the offensive, "very seriously hurting Hamas's ability to smuggle in weapons."

The bloodshed has opened faultlines in the map of Middle East diplomacy, with the Bush administration in its final week standing behind Israel, Europe pressing Israel to call off its attacks and Arab leaders speaking out against the Jewish state.

(Additional reporting by Ari Rabinovitch in Jerusalem and Stephanie Nebehay in Geneva; writing by Jeffrey Heller; editing by Angus MacSwan)