Fighting rages in Gaza as toll nears 1,000

This is the 18th day of the Israeli aggression against our people, which is becoming more ferocious each day as the number of victims rises," Palestinian president Mahmud Abbas said as terrified Gaza residents fled for their lives.

"Israel is keeping up this aggression to wipe out our people over there," added Abbas, speaking from his base in the West Bank.

Israeli special forces backed by tanks and air strikes barrelled their way ever deeper into Gaza's City, advancing several hundred metres (yards) into several neighbourhoods in the south, witnesses said. The thud of tank shells and the crackle of gunfire echoed through much of the day.

Although there were no reports of air strikes in the evening, residents reported extensive gunbattles in Zeitun neighbourhood and Jabaliya refugee camp on the city outskirts, where Apache helicopter gunships were also in action.

Palestinian medical sources said around 70 people were killed on Tuesday, bringing the overall toll to around 975 Palestinians, with a further 4,400 wounded.

Ten Israeli soldiers and three civilians have been killed in combat or by rocket attacks since December 27, when the Jewish state began its deadliest ever offensive on Gaza, ruled by the Islamist Hamas movement since mid-2007.

Israel also carried out a wave of bombing raids on the border town of Rafah, sending hundreds of people fleeing onto the streets.

"There are continuous airstrikes along the Egyptian border -- about 60 families have all fled their houses which are situated several hundred metres from the border," Jawad Harb, a Palestinian working for the international aid agency CARE, told AFP as a series of deafening blasts echoed in the background.

The United Nations' humanitarian office OCHA said the exact number of people who had fled their homes was unknown but added that more than 35,000 displaced people spent the night in temporary shelters, an increase of more than 7,400 on the previous 24 hours.

The Israeli military said its warplanes had attacked more than 100 targets since early on Monday morning, including 55 weapons-smuggling tunnels in southern Gaza.

Eighteen rockets and mortar rounds were fired into Israel, an army spokesman said, barely a quarter of the number recorded at the start of the offensive. No casualties were reported.

Israel's military chief said Operation Cast Lead was making progress but warned that troops faced "complicated" conditions in Gaza City, home to more than half a million Palestinians and where Israel has little combat experience.

"We have already achieved a lot against both Hamas's infrastructure and its military wing but we still have work to be done," the chief of staff, Lieutenant General Gabi Ashkenazi, told lawmakers.

A Hamas delegation is currently in Cairo for talks on a Western-backed proposal drawn up by President Hosni Mubarak to end the fighting.

A senior source in Cairo indicated Egypt was getting increasingly frustrated at Hamas's response so far to its initiative, saying "they need to say 'yes', now, to our plan."

One of Hamas's top leaders, Mussa Abu Marzuk, acknowledged the movement had "substantial observations" about the initiative but said there was "still a chance" they would accept the plan.

Hillary Clinton, due to take over as US secretary of state in a week's time, said Barack Obama's administration would make "every effort" to forge peace but ruled out talks with Hamas until it recognised Israel's right to exist.

"You cannot negotiate with Hamas until it renounces violence, recognises Israel and agrees to abide by past agreements," she told a Senate confirmation hearing. "That is just for me an absolute."

British Prime Minister Gordon Brown spoke with Israeli Prime Minister Ehud Olmert and with Mubarak, pressing them "for the specific measures necessary to deliver a full and sustainable ceasefire" in line with last week's UN Security Council Resolution.

Brown's office said he was "deeply troubled" by the suffering in Gaza, urged Israel to respect its humanitarian commitments and called on Arab leaders to "say more clearly that Hamas must disarm."

Egypt and Saudi Arabia blocked a proposal by Qatar for an extraordinary summit on the crisis later this week by saying discussions should instead take place at a summit in Kuwait already scheduled for January 19.

Aid agencies have warned of a growing humanitarian crisis in the territory where the vast majority of the 1.5 million population depends on foreign aid and is already reeling from 18 months of punishing Israeli blockade.

"Israeli bombardment is causing extensive destruction to homes and to public infrastructure throughout the Gaza Strip and is jeopardizing water, sanitation and medical services," said an OCHA field report.

"As of this morning, 60 percent of Gazans are not receiving any power. The rest receive electricity intermittently."