GAZA CITY, (AFP) - - Israeli troops and armour pushed deeper into Gaza's main city on Sunday, sending panicked Palestinian civilians into flight, after Israel warned it would step up its war on Hamas which remained defiant.

As the two sides battled on, ignoring world pleas to stop the 16-day-old war that has killed more than 850 people, Egypt was keeping up efforts to broker a truce in Israel's deadliest ever assault on the impoverished Gaza Strip.

Clutching babies and toddlers and carrying small harriedly-packed bags, dozens of Palestinians began to flee their homes on foot shortly after dawn in the Tal al-Hawa neighbourhood of southwest Gaza City, witnesses said.

During the night, Israeli tanks and infantry units moved into the adjacent neighbourhood of Sheikh al-Ajlin, creeping deeper into the main population centre of the battered Palestinian territory.

Intense shelling was also reported in the Zeitun neighbourhood of southeastn Gaza City as well as the Sudaniyah area in the northwest.

Israeli warplanes bombed about 60 targets throughout the Gaza Strip overnight, hitting weapon depots, smuggling tunnels as well as a mosque that was allegedly used to store weapons and train fighters, the army said.

Ground troops repeatedly exchanged fire with Palestinian fighters throughout the night, it said.

Palestinian medics said at least four Palestinians were killed and dozens wounded early Sunday. Some doctors said burn wounds were caused by banned white phosphorous shells, with Israel denying the charge.

Hamas and its allies fired three rockets into Israel, with the projectiles slamming as far as 40 kilometres (24 miles) inside the Jewish state without causing injuries.

Israeli planes on Saturday dropped leaflets over Gaza warning that the Jewish state was about to escalate the campaign it launched more than two weeks ago aimed at halting rocket fire into Israel.

Dr Yusef Abu Rish at Gaza City's Nasser hospital told AFP that at least 55 people were injured early Sunday by white phosphorous shells, banned under international law for use against civilians , but permitted for creating smokescreens.

"These people were burned over their bodies in a way that can only be caused by white phosphorous," said Abu Rish.

An Israeli military spokeswoman denied the claims. "There is no use of white phosphorous. Everything we use is according to international law," she said.

With the body count spiralling, the exiled political chief of Hamas, Khaled Meshaal, remained defiant, vowing the Islamists would not negotiate "under fire."

Branding the Israeli operation a "holocaust," Meshaal said "the enemy had totally failed."

"Has it stopped the rockets?" he asked of Israel's declared aim in launching the offensive. "You have lost on the moral and humanitarian fronts... and you have created a resistance in every house."

He once again ruled out reaching a permanent truce with Israel, a country his movement is pledged to destroying.

"We will not accept a permanent truce because... as long as there is an occupation there is a resistance," he said, adding that his group would not hold talks on a temporary truce until Israel stopped its offensive.

"We will not accept negotiations on a truce under fire," he said. Israel had wrecked "the last chance for a settlement" with its assault on Gaza.

Since the Israeli offensive began on December 27, at least 854 people have been killed, including 270 children, and another 3,490 wounded, according to Gaza medics.

Ten Israeli soldiers and three civilians have been killed in combat or in rocket attacks since the operation began, as Palestinian militants have fired more than 600 rockets, some of them penetrating deeper than ever inside Israel.

Egypt has been spearheading Western-backed efforts to end the fighting, calling for an immediate truce, opening Gaza's border crossings, preventing arms smuggling and a call for Palestinians to resume reconciliation talks.

Both Hamas and Israel have brushed aside a UN Security Council resolution which last Thursday called for an immediate truce in the territory.

The conflict has sparked worldwide pro-Palestinian demonstrations, including rallies in Europe that drew tens of thousands of protesters. More rallies were planned for Sunday.

Is this article useful to you?