Gaza Fighting Rages Despite Cease-Fire Proposal

"There must be guarantees to ensure Israel will not breach this package, including halting the aggression, lifting the blockade and opening the crossings," said Ghazi Hamad, a senior Hamas adviser.

File picture of Palestinian children in Gaza as they carry bottles of water in Khan Younis refugee...

File picture of Palestinian children in Gaza as they carry bottles of water in Khan Younis refugee camp, southern Gaza Strip, Sunday, June 22, 2008.Gaza's 1.4 million people are increasingly preoccupied with obtaining basic supplies such as water and food according to a recent report.

(Khalil Hamra/AP Photo)

Growing international outrage over the human toll of Israel's offensive, which includes 3,000 Palestinians wounded — could work against continued fighting. So could President Bush's departure from office this month and a Feb. 10 election in Israel.

But Israel has a big interest in inflicting as much damage as possible on Hamas, both to stop militant rocket fire on southern Israeli towns and to diminish the group's ability to play a spoiler role in peace talks with Palestinian moderates.

The Israeli Cabinet formally decided on Wednesday to push ahead with the offensive while at the same time pursuing the cease-fire option. Israeli officials also rejected Hamas' call to open the border crossings, which Israel has largely kept closed since the group seized the territory by force in June 2007.

The military has called up thousands of reserve troops that it could use to expand the Gaza offensive. Defense officials said the troops could be ready for action by Friday.

Still, Israel briefly suspended its offensive Wednesday to allow humanitarian supplies to reach Gaza, and Israeli officials said such lulls would be declared on a regular basis.

The announcement came among growing warnings by the World Bank and aid groups of a humanitarian crisis. The Word Bank pointed to a severe shortage of drinking water and said the sewage system is under growing strain.

Solafa Odeh, a resident of the northern Gaza Strip town of Beit Lahia, said around 100 people in her community were lining up for fresh water outside a local grocery store Wednesday. "We were only allowed half a gallon each, and I saw some people walk away with their jerry cans empty," Odeh said.

Of the 688 Palestinians killed since Dec. 27, some 350 were civilians, among them 130 children, according to Palestinian officials.

During Wednesday's lull, Israel allowed in 80 trucks of supplies as well as industrial fuel for Gaza's power plant. Medics tried to retrieve bodies in areas that had previously been too dangerous to approach.