GAZA - Gun battles raged last night in northern Gaza after Israeli tanks and soldiers crossed the border to stop Hamas firing rockets into Israel.
Fierce fighting broke out between Israeli forces and Palestinian gunmen in Beit Lahiya after Israeli forces fired on militant in the west of the city.
The battle came after Israel seized control of former Jewish settlements in the northern Gaza Strip, effectively carving a buffer zone after militants fired rockets into a major Israeli city.
Hamas revoked its truce with Israel after eight civilians were killed at the beach in Beit Lahiya in June.
Prime Minister Ehud Olmert ordered the expansion of the offensive, which began last week, after rockets hit Ashkelon, 12km inside Israel.
Backed by helicopters, tanks moved in to the ruins of three of the 21 Jewish settlements evacuated when Israel left Gaza last year. Rockets are often fired from the settlements.
One Hamas militant was killed in an airstrike in northern Gaza. Palestinian gunmen had been preparing positions and planting bombs to confront the Israeli Army.
"Our presence there doesn't mean that we intend to remain in the Gaza Strip. We simply want to prevent firing at our towns," Binyamin Ben-Eliezer, a member of Olmert's security Cabinet, told Israeli Army Radio.
The military said it would stay in the area "until the completion of their mission" and called on Palestinian civilians to stay clear of combat zones.
Israeli political sources said Olmert had effectively decided to carve out a buffer zone to halt rocket attacks. But his office said the offensive would not amount to long-term re-occupation,
Rockets hit Ashkelon, a city of 115,000, on Wednesday and yesterday. It was the furthest point hit by the missiles, which cause few casualties but spread panic.
The incursion in northern Gaza has intensified pressure on the Hamas-led Palestinian Government, already facing Israeli threats over the abduction of Gilad Shalit on June 25.
"We won't sink in the Gaza swamp, but will enter any necessary area to carry out our missions," Defence Minister Amir Peretz said.
The Gaza violence has dampened enthusiasm for Olmert's plan to give up some isolated settlements in the occupied West Bank, while strengthening the main blocs there.
Olmert's opponents say the lesson from Gaza is that giving up land may not bring peace.
Palestinians seek at least the West Bank and Gaza for a state with Arab East Jerusalem as its capital. Hamas is sworn to destroy Israel.
Israeli aircraft kept up nightly raids on Gaza, firing missiles at militant training camps and roads.
A total of 11 Palestinians, almost all of them militants, have been killed since the offensive began. Israel has also detained dozens of Hamas officials, applying pressure to an Administration already under an international aid embargo.
UN Secretary-General Kofi Annan yesterday called on Israelis and Palestinians to "step back from the brink", warning that their escalating confrontation could soon turn explosive.
One Palestinian source close to negotiations with Egyptian mediators said the militants were ready to release Shalit, 19, if Israel set a timetable for freeing some Palestinian prisoners. Israel has rejected any talks or a prisoner swap.
In Damascus, exiled Hamas leader Khaled Meshaal told a visiting Turkish official the group favoured a deal to end the crisis and was ready to show flexibility, but only if Israel agreed to a prisoner swap, political sources said.
- REUTERS
Israel carves Gaza 'buffer zone'
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