Israel deaf to truce calls as Gaza battles rage on

By Nidal al-Mughrabi

GAZA (Reuters) - Israeli troops backed by air strikes fought to seize ground from Hamas militants deep inside the Gaza Strip on Monday despite international calls for a cease-fire in a conflict that has killed more than 540 Palestinians in 10 days.

More than 30 civilians, including children, were killed on Monday, the third day of an Israeli ground offensive, medics said. Israel said it killed dozens of Islamist guerrillas as the battle crept into the suburbs of the city of Gaza itself.

Frightened families huddled in rooms away from windows: "Until now I was not afraid," a Reuters journalist said from his home in the city of 500,000. "I am afraid now and my daughter is trembling the whole time. No place seems to be safe."

Israel's defence minister said the assault, which he hopes can stem rocket fire on its own towns, could get harder for troops. They were edging forward, wary of Hamas's quest for more captives to join a soldier used as a bargaining chip since 2006.

Hamas vowed to fight on in "every street, every alley" and threatened to fire more missiles across the border into Israel. Threats to resume suicide bombings have yet to materialise.

French President Nicolas Sarkozy, on a peace mission to the Middle East, and U.S. President George W. Bush, in his final weeks in the White House, both appealed for a cease-fire.

But disagreement on who should stop shooting first and on what terms made the chances of an immediate pause seem remote.

The reminder of conflict stubbornly rooted at the heart of the Middle East helped drive oil prices up 5 percent and analysts questioned whether there was any prospect of a peace that has eluded Israel and the Palestinians for over 60 years.