Israeli Forces Cut Gaza in 3; More Than 500 Palestinians Killed

Israeli troops moved deeper into the Gaza Strip Monday, attempting to slice Gaza into three sections to strengthen their grip around the territory's cities.

Israel's assault on the governing Hamas regime has raised the Palestinian death toll to 550, with more than 2,800 injured, and Gaza's main hospital has seen a major influx of civilian casualties since Israeli troops crossed the border Saturday.

Hamas and Israeli forces have been locked in fierce close-quarter battles. In the north, Israeli forces occupied land from where Hamas fires rockets. Israeli tanks reached the coast and are attempting to extend their reach to the south to limit Hamas' mobility.

"At the end of the day, we want to create an image on the other side that Israel went berserk -- it's not worth it to keep firing rockets, as the price they will pay is too high," said Israeli defense expert Alon Ben David.

Israel's three-part strategy hasn't brought victory yet. Troops entering Gaza were greeted by Hamas' anti-tank rockets and mortars. One rocket hit a building the Israelis had taken over, which collapsed, killing three Israeli soldiers and seriously wounding 30.

Despite the invasion, Palestinian fighters have launched 38 rockets out of the embattled enclave into southern Israel today. One rocket hit an Israeli kindergarten, but as a preventive measure, all schools within a 25-mile radius of Gaza have now been shut down. Hamas is also battling back by trying to kidnap Israeli soldiers. One report cited an unsuccessful effort to drag an Israeli soldier into a tunnel.

In Gaza, Israeli shelling killed more Palestinians today, including 12 children. Deaths brought threats of revenge from a senior Hamas leader, who made a rare appearance to rally his troops.

Hamas' second in command, Mahmoud Zahar, released a statement to Alaqsa TV stating, "By killing our children you legitimize us killing your children. By bombing our mosque you legitimize us bombing your synagogue. By bombing our hospitals you legitimize to us bombing your hospitals."

In 10 days of fighting, Israel has hit 1,000 targets throughout the Gaza Strip, concentrating most of its firepower on taking out smuggling tunnels and weapons storage sites.

Israel moved one contingent of troops into the southern end of the Gaza Strip to cut off the movement of Hamas fighters and weapons from the border town of Rafah.

ABC News correspondent Lama Hasan reporting from the Egyptian side of the Rafah border, observed heavy shelling on the Palestinian side. The Israelis have been attacking tunnels around Rafah that Hamas uses to smuggle in fighters and weapons.

A similar cordon has split Gaza in the north, and Israeli troops are also encircling Gaza City, the strip's largest population center.

One Israeli soldier was killed in the fighting and buried on the same day, according to Jewish custom. A video of his coffin draped in the Israeli flag was shown on national television.

More than 50 Israeli soldiers have been injured, but avoiding injury isn't their only concern. Israel's Defense Force said Hamas has made unsuccessful attempts to kidnap its soldiers.

Israeli soldier Cpl. Gilad Shalit was kidnapped by Hamas two years ago and has become a bargaining chip in any potential talks between Israel and Hamas.

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