UPDATED - Israel declares ceasefire, Hamas fire rockets

Palestinian rockets fired from the Gaza Strip hit the southern Israeli town of Sderot this morning, the first such attack since a unilateral Israeli ceasefire went into effect at 2 a.m., Channel 10 television reported.

Seconds after Israel Radio announced that a rocket alarm had sounded in Sderot, a Channel 10 reporter in the town said he heard two explosions. Channel Two television said six rockets had been fired at southern Israel. Israel fired back at the rocket launchers.

Earlier, Israeli forces and Palestinian militants waged a brief gun battle in the Gaza Strip, the Israeli military and Hamas sources said. Hamas has rejected the ceasefire, saying it would continue fighting as long as Israeli troops remained in the territory.

Israel ceased fire in the Gaza Strip early this morning after declaring victory in its three-week offensive but Hamas guerrillas said the war that has cost 1,200 Palestinian lives would go on.

Egypt's President Hosni Mubarak invited European leaders to a hastily-called summit to try to bolster the unilateral truce although Israel had sidestepped Cairo's efforts to achieve a negotiated end to the hostilities with Hamas.

The racket of explosions and gunfire of the past 22 days went silent in Hamas-ruled Gaza after the Israeli ceasefire went into effect.

Israeli Prime Minister Ehud Olmert said in a televised address yesterday that Hamas had been "badly beaten" in the offensive, launched before a February election to end Hamas rocket attacks on southern Israel that were undermining support for the governing coalition.

"Conditions have been created whereby the goals set at the launch of the operation have been more than fully achieved," Olmert said.

Gaza's Islamist rulers said they would keep firing rockets at Israel until it withdrew its troops and ended its trade blockade on the coastal enclave.

"These constitute acts of war so this won't mean an end to resistance," Hamas spokesman Fawzi Barhoum said.

Olmert said Israel's troops would remain in place and hit back if the Palestinians tried to fight on.

"If our enemies decide the blows they've been dealt are not sufficient and they are interested in continuing the fight, Israel will be prepared for such and feel free to continue to react with force."

SHORT-NOTICE SUMMIT

Mubarak invited European leaders to a short-notice summit on Sunday to find ways to bolster the truce and ease the plight of civilians crammed into the 45-km (28-mile) sliver of Gaza coast.

Mubarak will host Palestinian President Mahmoud Abbas and U.N. chief Ban Ki-moon in Sharm el-Sheikh on Sunday, along with the leaders of France, Britain, Germany, Turkey, Italy and Spain.

Olmert cited internationally backed understandings with Egypt, Gaza's southern neighbour, on preventing Hamas from rearming through smuggling tunnels as a reason behind Israel's decision to call off its attacks.

U.N. Secretary General Ban welcomed the Israeli ceasefire but also urged it to pull out its forces from Gaza rapidly.

U.S. Secretary of State Condoleezza Rice, who had spoken up for what Israel saw as its right to self-defence despite the civilian casualties, said she hoped for a durable ceasefire and a long-term settlement for the problems of Gaza.

Rice and President George W. Bush are stepping down and many analysts believe Israel, eager for smooth relations from the outset with the new president, has been keen to end the fighting before Barack Obama takes over the White House on Tuesday.

Israel launched air strikes on the Gaza Strip on Dec. 27 and ground troops pushed into the enclave a week later, saying its main aim was an end to the rocket fire that had killed 18 people in Israel over the previous eight years.

Without an accord with Hamas, diplomats said they feared Israel would let only a trickle of goods into Gaza, hampering reconstruction and creating more hardship for its people.

"So long as there is no agreement on the crossings, I frankly cannot see the end to the hostilities," said Shlomo Ben-Ami, who was Israel's left-leaning Labour foreign minister when peace talks with the Palestinians collapsed in 2001.

The road ahead for the Obama administration in promoting a peace settlement that has eluded Israelis and Palestinians for the 60 years since Israel was established remains bumpy.

Hamas, which won a parliamentary election in 2006 and seized Gaza from Abbas's forces a year later, is shunned by the West but remains a popular force in both Gaza and the West Bank.

It is unclear what effect this month's war will have on the division between the Palestinians factions. Without an end to the bitter rift between Hamas and Abbas, a deal with Israel on establishing a Palestinian state still seems distant to many.

MANY IN GAZA DESPERATE

After the deaths of perhaps more than 700 civilians in the Israeli offensive, many of Gaza's 1.5 million people are desperate for a respite.

Most of those, their nerves shredded and sleepless with fear and bereavement, just want the war to be over.

"We do not care how, we want a ceasefire. We want to go back to our homes. Our children need to go back to sleep in their beds," said Ali Hassan, 34 and a father of five, in Gaza city.

Figures from an independent Palestinian human rights group put the number of civilians killed in three weeks of aerial bombardment and a two-week-long ground offensive backed by tanks and artillery at over 700. Hundreds of fighters have also died.

Ten Israeli soldiers and three civilians have been killed.

Gaza's Hamas-run Health Ministry said some 5,300 wounded had been treated, many at chaotic, sanctions-hit hospitals. It put the death toll to Saturday at 1,206, including 410 children.

Of these, two young boys were killed early on Saturday at a United Nations-run school where hundreds of people had taken refuge. U.N. officials called for war crimes inquiries.

Israel accuses Hamas fighters of hiding among civilians and says its troops do all they can to avoid hitting non-combatants in a territory where half the population is aged under 18.

Olmert said he apologised for the suffering of the innocent, and Israel announced plans to open a clinic Sunday at the Erez Crossing with Gaza to treat the wounded.