Israeli forces squeeze Gaza

Israeli forces tightened their hold around the city of Gaza today and Israel's top general said "there is still work ahead" against Hamas in an 18-day-old offensive that has killed more than 900 Palestinians.

Explosions and heavy machinegun fire echoed through the city of 500,000 after Israeli tanks drew closer to its densely populated centre but did not enter, local residents said.

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

"We even silenced our mobile phones because we were afraid the soldiers in the tanks could hear them," Jad said. "Some of us recited from the Koran and others prayed the sounds of explosions would die down."

Medical workers said 18 Palestinian gunmen, most of them members of the Islamist Hamas group that rules the Gaza Strip, and seven civilians were killed in fighting in the territory.

"The cemetery is full," read a sign outside one of the biggest cemeteries in the city of Gaza. "Please do not bury here because there is no room."

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

Israeli aircraft attacked 60 targets, including tunnels used by Gaza militants to smuggle arms across the border from Egypt, weapons-making sites and Hamas command posts, the army said. Two rockets hit Beersheba in southern Israel, causing no 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.

UN 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.

"My message is simple, direct, and to the point: the fighting must stop. To both sides, I say: Just stop now," Ban told reporters before his departure.

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 in a new report, Human Rights Watch said Israel's daily three-hour break in attacks to facilitate the supply of humanitarian aid to Gazans was "woefully insufficient".

Iranian state radio said an Iranian ship carrying aid to the Gaza Strip was stopped by Israel's navy off the coast of the Palestinian territory. An Israeli military spokesman said he had no report of any such encounter.

Palestinian medical officials said at least 937 people in the Gaza Strip have been killed and nearly 4,000 wounded since the offensive began. The health minister in Gaza's Hamas-run government said close to 400 of those were women and children.

Thirteen Israelis -- 10 Israeli soldiers and three civilians hit by mortar bombs and rockets from the Gaza Strip -- have been killed since Israel launched the offensive with the declared aim of ending Hamas's cross-border strikes.

Political sources said Israeli Prime Minister Ehud Olmert, Defence Minister Ehud Barak and Foreign Minister Tzipi Livni decided late yesterday 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 ceasefire mediation, but it would continue to hit Hamas while diplomatic efforts were under way.

Hamas says Israel must pull back all its troops under a ceasefire 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 ceasefire plan.

Israel has rebuffed as "unworkable" a UN Security Council ceasefire 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".

Earlier an Israeli general, speaking to reporters touring Israeli positions, said his forces were "tightening the encirclement" of the city of Gaza. Israeli armour also pushed into villages near the southern town of Khan Younis.

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.