First major Israel-Hamas fighting in Gaza City

Israeli troops engaged in heavy gun battles late Monday with Hamas fighters in Gaza City for the first time since the start of the army's ground offensive, military sources and witnesses said.

Large explosions and heavy exchanges of fire rocked Shejaiya neighbourhood of eastern Gaza City as Israel pressed its campaign to halt Hamas rocket attacks.

Hamas said in a statement that its fighters had fired missiles at seven tanks in the same district. The Islamic Jihad movement said several of its members were killed in the fighting.

Israeli military sources confirmed that troops were involved in
heavy clashes in that area.

Fifty Palestinians -- including 12 children -- were killed in the Israeli offensive against Hamas in the Gaza Strip on Monday, the head of the territory's emergency services told AFP.

Israeli fire killed a mother and four of her children in Gaza City after a rocket hit their house, medics said.

The official, Muawiya Hassanein, said 555 Palestinians have now been killed since the start of Israel's offensive to halt Hamas rocket fire on Dec. 27.

He added that 2,700 people have been wounded in air raids and tank shelling.

Intl observers

Israel earlier rebuffed European proposals for international observers in the Gaza Strip after any ceasefire, pushing instead for teams that will help search out and seal off tunnels that could allow Hamas to rearm.

Foreign Minister Tzipi Livni, a leading candidate to become Israel's next prime minister in a Feb. 10 election, said she saw no reason for an observation and monitoring force, one of several proposals made by European powers in their bid for a truce to end Israel's 10-day-old military offensive in Gaza.

"I don't see how this can help," Livni told reporters during a press conference with visiting European leaders.

Israel wants any international mission on the Gaza Strip's border with Egypt to be focused instead on preventing Hamas from re-establishing a network of underground tunnels that could be used to smuggle in long-range rockets and other weapons, Israeli officials involved in the deliberations said.

Tenth day

Israel's leaders made clear they were in no rush to enter into a ceasefire despite growing international pressure.

Defense Minister Ehud Barak earlier said in a statement that Israeli troops have partially surrounded Gaza City as the Jewish state pressed on with a ground offensive in Gaza, which the Israeli army has cut in two.

"Gaza City is partially surrounded," Barak told parliament's foreign affairs and defense committee.

His comments followed reports on the ground that Israeli ground troops were operating north, south and east of the main city in the embattled territory.

It marked the furthest the Israeli troops have gone into Gaza since the Jewish state unilaterally withdrew from the territory in 2005.

A Hamas official said a delegation of the Islamist group would head for talks in Egypt, which has also launched contacts to achieve a ceasefire to end Israel's offensive.

Explosions from gunfire rocked Gaza overnight after Israeli soldiers moved into a northern zone and asked residents to leave their homes to avoid being hurt in the fighting. Some families sought refuge in nearby United Nations run schools.

Gaza City is partially surrounded,

Israeli Defense Minister Ehud Barak

Searching houses

Israeli media said Israeli troops were searching house-to-house in parts of Gaza for Hamas suspects. Israel Radio reported gun battles between Israeli and Hamas militants in the streets of Gaza City, and said Israeli troops thwarted an attempt to capture one of them in a fight inside a house.

Israel launched its offensive with aerial bombardments on Dec. 27 to curtail Palestinian rocket attacks from Gaza ahead of an Israeli national election next month, then expanded it into a ground invasion on Saturday.

Four Israelis have been killed by rockets and mortars fired at Israel since the offensive began, and an Israeli soldier was killed in fighting on Sunday and 48 were wounded after Israel expanded its operation into a ground invasion.

Intl diplomacy

French President Nicolas Sarkozy arrived in the region on Monday in a fresh diplomatic push for a truce, which Israel has thus far resisted.

The United States, the region's powerbroker and Israel's closest ally, looked all but sidelined by the pending handover of its presidency, offering Europe a chance to take the lead and press for an end to the Israeli assault.

The Bush administration has supported Israel, saying Hamas had to halt rocket fire at Israel for a truce to take shape.

U.S. President-elect Barack Obama has been silent on the crisis, his advisers saying only President Bush would speak for Washington until Obama is sworn into office on Jan. 20.

U.N. Secretary-General Ban Ki-moon said he had recalled his special Mideast envoy for briefings, adding he was worried about the humanitarian situation in Gaza.

Operation could take days

Israel said that the Gaza operation, though sparking waves of protests around the world, could last many days.

Government officials said Israel had set several goals, including weakening Hamas by killing its fighters and destroying its rocket arsenal.

In addition Israel hopes to deter cross-border salvoes and win international backing for new security arrangements along the Egyptian-Gaza border to prevent Hamas from rearming through tunnels, which have been bombed in the current campaign.

Hamas is estimated to have about 25,000 fighters. Israel has not disclosed how many troops are involved in the operation but thousands of reservists were on stand-by.

Hamas called off a six-month truce last month and stepped up its rocket attacks, citing Israeli raids and a continuing blockade of the enclave Israel quit in 2005.

Israel's president Shimon Peres made clear there would be no military let-up until Hamas stopped firing.

Army confiscates phones

The Israeli army confiscated the mobile phones of thousands of soldiers ahead of the launch of its massive ground offensive in Gaza, an official said on Sunday.

Six hours before the start of the operation Saturday evening, thousands of infantry and armored forces were ordered to hand over their mobiles in order to keep the impending attack secret.

Before the start of the blitz on Dec. 27, the authorities also made use of deception techniques -- by sending soldiers home on weekend leave and releasing false information on planned cabinet meetings.

The Israeli army has also used ruses to confuse militants in the Hamas-ruled territory -- in one case, it sent dozens of units to different locations along the Gaza border, he said.