Israeli tanks rolled into densely populated parts of the city of Gaza on Tuesday and troops fought intense battles with Hamas militants as world leaders struggled to coax the sides into a ceasefire.
Hamas said its forces detonated explosives beneath Israeli armor and fought with Israeli forces backed by helicopter gunships and naval fire in what appeared to be the most ferocious fighting since Israel sent ground troops into Gaza 10 days ago.
Explosions and the din of heavy machine gun fire echoed continuously through the Hamas-ruled territory's largest city before dawn. Flashes of light lit up the skies.
The Palestinian death toll in the 18 days since Israel launched its air offensive passed 900, including many civilians. Israel has had 10 soldiers killed and three civilians from motars and rockets fired from coastal Gaza.
United Nations Secretary-General Ban Ki-moon headed to the region to press for a truce in a week of talks with leaders in Egypt, Israel, Jordan and Syria.
"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.
Egypt pursued efforts to broker a ceasefire with Gaza, a territory that sits on its northern border.
But Lebanese political sources said Hamas negotiators would on Tuesday reject Cairo's proposals to end the offensive Israel said it launched so as to halt sporadic rocket fire from Gaza that causes few casualties but disrupts life in southern Israel.
Hamas's main objections were to a proposed long-term truce and to any ceasefire being put in place before Israel withdrew all its forces from Gaza, one of the Lebanese sources said.
Israel has rejected a United Nations Security Council call for a truce but said it was ready to discuss further proposals.
TANKS DEEPER INTO GAZA
Despite a world drive to end the fighting, Israel pressed on with its offensive, sending its tanks into built-up areas in the city of Gaza, the deepest thrust since the attack began.
Israeli military spokesman Brigadier General Avi Benayahu said on Monday Israel was "deeper in the territory". Reserve units had moved in to free up regular troops for the push into the city.
"We are tightening the encirclement of the city," Brigadier General Eyal Eisenberg told reporters touring Israeli positions on Monday.
Three Israeli soldiers were wounded in a "friendly fire" incident in Gaza on Monday night, the military spokesman said.
Violence was also reported in the occupied West Bank, where gunmen shot and wounded four soldiers while shooting at an Israeli vehicle, a military spokesman said.
Palestinian medics said at least 913 people in Gaza have been killed in the Israeli attacks launched since Dec. 27 in the territory. The health minister in Gaza's Hamas-run government said close to 400 of those were women and children.
The bloodshed has burst open 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.
SAUDIS ACCUSE ISRAEL
On Monday, Saudi Arabia, an oil power and one of several Arab governments whose pro-American stance is far from popular with its people, accused Israel of "racist extermination".
It said it hoped Bush's successor Barack Obama would work swiftly to resolve the 60-year-old Palestinian issue.
Bush said on Monday it was up to Hamas, which won a 2006 parliamentary election and seized control of Gaza 18 months ago, to end the misery of the enclave's 1.5 million people.
"I'm for a sustainable ceasefire, and a definition of sustainable ceasefire is Hamas stops firing rockets into Israel ...I happen to believe the choice is Hamas's to make," Bush said.
Bush said Israel had a right to defend itself but he hoped it would "continue to be mindful of innocent folks" and help expedite the delivery of humanitarian aid to Palestinians.
Human rights groups report shortages of vital supplies including water, in Gaza, due to the fighting. A fuel shortage has brought frequent power blackouts. Israel has permitted almost daily truck shipments of food and medicine.
Israeli leaders, facing a Feb. 10 election, have given few clues on how long they would continue the offensive. Analysts have cited Obama's coming inauguration on Jan.20 as a factor pushing for an end to the fighting.
Hamas rejects Israel's right to exist as a Jewish state, and opposes U.S.-backed peace talks with Israel conducted by Palestinian President Mahmoud Abbas, whose Fatah movement lost control of Gaza to Hamas in 2007,
Hamas negotiators returned to Cairo late on Monday after consulting the leadership in exile in Damascus.
Ismail Haniyeh, Hamas's leader in Gaza, said the group would negotiate a truce but only if Israel pulled back all its forces and ended a Gaza blockade.
A Lebanese source close to Hamas said the group wanted a truce for a limited time and objected to the presence of any foreign observers at the Rafah crossing between Gaza and Egypt.
Israel says any ceasefire must halt Hamas rocket fire and wants measures to stop Hamas from rearming via tunnels under the Egypt-Gaza border, in an area known as the Philadelphi corridor.