Israel struck several targets in Gaza today as ground troops began a gradual redeployment in some locations along the border area, a day after the government signalled it would scale back its 27-day-old offensive.

Israel had earlier said that a soldier it had feared captured by Hamas militants was instead killed alongside two other soldiers on Friday near the southern town of Rafah in an ambush that shattered a ceasefire and ignited heavy shelling, leaving dozens of Palestinians dead.

Today artillery shells slammed into two high-rise office buildings in central Gaza City and large explosions could be heard seconds apart, police and witnesses said.

Gaza health official Ashraf al-Kidra said 30 Palestinians were killed today, including nine in a single strike in the southern Gaza Strip. Israel said it carried out 180 strikes today.

While fighting continued, several Israeli tanks and other vehicles were seen leaving Gaza.

In a televised address late yesterday, prime minister Benjamin Netanyahu suggested troops would reassess operations after completing the demolition of Hamas military tunnels under the border. Security officials said the tunnel mission was winding down.

At the same time, Mr Netanyahu warned the territory's Hamas rulers that they would pay an "intolerable price" if militants continued to fire rockets at Israel and that all options remain on the table.

In nearly four weeks of fighting, more than 1,700 Palestinians, mainly civilians, have been killed as well as nearly 70 Israelis, almost all soldiers.

The Israeli military death toll rose to 64 after Israel announced that Hadar Goldin, a 23-year-old infantry lieutenant feared captured in Gaza, was actually killed in battle. His funeral is later today. Three civilians have been killed on the Israeli side since hostilities began.

Hamas has said it will not stop fighting until Israel and Egypt lift their blockade of Gaza, imposed after the Islamic militant group overran the territory in 2007.

Large swathes of Gaza have been destroyed and some 250,000 people have been forced to flee their homes since the war began on July 8.

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