Reuters - Israeli artillery shelled the Gaza Strip on Saturday, stepping up the offensive against Hamas militants in the Palestinian enclave as tanks and troops waited on the border for a possible ground offensive.
Earlier in the day Israel bombed Gaza from the air and sea, killing a senior Hamas commander. Hamas meanwhile kept up its rocket attacks on southern Israeli towns in defiance of international calls for it to cease such actions.
As the offensive entered a second week, desperate Gaza residents sheltered in their homes and humanitarian agencies warned that food, water and medical supplies were running short.
Just before nightfall Israel launched artillery fire on Gaza for the first time in the offensive, witnesses on both sides of the border said.
The barrage caused a large explosion in Gaza City as well as a series of blasts along the frontier, creating a fog of dust and smoke that obscured visibility. There was no immediate word of casualties.
Deputy Defence Minister Matan Vilnai played down speculation the artillery fire heralded a ground offensive.
"I don't think this is the next stage. This is part of a military campaign being waged and now artillery cannons have joined in," he told Israel Radio.
Israeli tanks and troops were massed on Gaza's borders in readiness for a ground invasion that remains an option unless international efforts to arrange a ceasefire gain momentum.
A Hamas leader warned that the Israeli army would be defeated if it invaded Gaza, which the Islamist group runs.
At least 20 Israeli air strikes targeted Gaza earlier on Saturday and naval vessels also shelled the area from the Mediterranean, witnesses said.
One strike killed Abu Zakaria al-Jamal, a senior commander of Hamas's armed wing, the Islamist group said. He was the second Hamas leader killed in three days and most of Hamas's senior officials have now gone into hiding to evade assassination attempts by Israel.
Israeli war planes also hit a private Palestinian college called the American School, killing a guard. The Israeli military said the school was a hiding place for Hamas fighters and a base for firing rockets.
At least 435 Palestinians have been killed in the offensive and more than 2,000 wounded, at least a quarter of them civilians, according to the United Nations.
Targets have included the Islamic university, government buildings, mosques and civil police stations which Israel says are used as bases by Hamas militants.
Israel launched the campaign, called Operation Cast Lead, on Dec. 27 to stop Hamas rocket attacks on southern Israel.
They have continued however and 14 Hamas rockets smacked into Israel on Saturday, the Israeli military said. Two people were hurt by shrapnel when a rocket hit a building in the port city of Ashdod.
Four Israelis have been killed by Hamas rockets since the offensive began. Residents of southern towns have regularly been forced to hunker down in shelters.
The Hamas cabinet said on Saturday the Israeli campaign would not "change realities in the Gaza Strip".
"Whoever thought a change in the political area could come through the bombs of planes and the tanks and without dialogue is an illusionist," it said in a statement after meeting in Gaza at a location not disclosed due to the security situation.
Israel denies that it aim is to topple Hamas but says the rocket attacks must stop before it halts operations.
NOWHERE TO RUN
The plight of the 1.5 million Palestinians crammed into Gaza was grim.
"Nobody feels safe," an International Committee of the Red Cross worker said in a report on the body's website.
"The problem is that we have nowhere to run for shelter."
Streets were almost empty on Saturday with people too frightened to venture out. Most shops were closed.
Bombs have damaged the water system but it was too dangerous for aid workers to help with repairs, the report said.
Hospitals have a minimum supply of drugs and other basics to treat the wounded but more will be needed in coming days, it said. Among the items provided were white sheets for the dead.
The United Nations said Gaza's utilities were barely functioning. The electric power plant has shut down and the sanitation system cannot treat the sewage.
In the winter cold, fuel for heating and cooking gas was no longer available.
"We do not sleep at all at night. We stayed awake the whole night because of the planes," said Umm Kamel, a mother of 11 baking bread in her home in Gaza.
Israel has denied a humanitarian crisis is unfolding and has allowed convoys of food and medicine to enter Gaza daily.
U.S. President George W. Bush said Hamas -- which the United States, Israel's main backer, deems a terrorist organisation -- must take the first step towards a ceasefire.
"Another one-way ceasefire that leads to rocket attacks on Israel is not acceptable," Bush said in remarks prepared for his weekly Saturday radio address.
Israel occupied Gaza in the 1967 Middle East War and after Palestinian uprisings formally ended its military rule in 2005, although it still controls the borders.
International peace efforts aimed at creating an independent Palestinian state foundered after Hamas won elections in 2006 and drove Fatah forces loyal to Palestinian President Mahmoud Abbas from Gaza a year later.
Hamas called off a six-month truce with Israel last month and stepped up the rocket attacks, complaining at Israeli raids into Gaza and a continuing blockade of the enclave.
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