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.

Israel Allows Aid to Enter Gaza

Civilian casualties in Gaza are increasing. United Nations officials in Gaza reported today that the Palestinian death toll since the ground war began is 94. Among the dead was a family of seven, including both parents and five children, in the Shati refugee camp in northern Gaza. The family was killed by a single Israeli shell.

The United Nations said 20 percent of the 548 Palestinians who have died in the 10 days of fighting are civilians. Gaza civilians are terrified by the relentless shelling, which brought darkness after a power outage Monday. Nearly 75 percent of Gaza is without electricity, and more than half a million residents are without water.

ABC News' producer in Gaza, Sammi Zyara, said that Israeli forces opened fire on the roof of his home today. His wife and eight children have not left their house in 10 days.

Dr. Mads Gilbert is working in Gaza's main hospital, Al Shifa Hospital, and told the BBC by phone that Israel's claim that it isn't targeting civilians is "absolutely stupid."

Gilbert said 45 percent of his wounded patients in his overcrowded emergency rooms are women and children.

He told the BBC that his hospital has had to double up in the operating rooms, with two surgeries in each room that usually handles one. And they are running out of medicine and bandages.

"People are dying now because of the lack of supplies. ... The patients have to wait a long time for surgery, and they are dying waiting for surgery," he said.

Jenny Linnel, a British volunteer with the International Solidarity Movement, a Palestinian nonviolent resistance movement, told ABC News that the fighting was taking a cruel toll on children.

"Nowhere is safe in the Gaza Strip," she said.

Today also marks the first time since Saturday that Israel has allowed 80 trucks carrying humanitarian aid to enter Gaza through the Kerem Shalom border crossing at the southern tip of Gaza. The Israeli Defense Forces claim that more than 400 trucks were allowed into Gaza last week.

According to the U.N. Relief and Work Agency, 20 trucks carrying flour are on their way to Gaza. The U.N. Office for the Coordination of Humanitarian Affairs told ABC News that the Nahal-Oz fuel terminal in southern Israel would open for about an hour to transfer 100,000 liters of diesel, 450,000 liters of industrial fuels and 60 tons of cooking gas.

There were also reports earlier that Gaza's wounded were being allowed into Egypt today, through the Rafah border crossing. Seventeen patients and four trucks carrying medical supplies are scheduled to transfer to Egypt later today, according to a representative for the U.N. Office for the Coordination of Humanitarian Affairs.

But the Egyptian military has closed the road to Rafah crossing. The head of the Egyptian military press office told ABC News unequivocally that no aid would cross the Rafah border because it was "too dangerous."

A doctor at the scene told ABC News that trucks carrying aid are loaded and ready to go but that the crossing is still closed and that there's no one on the Palestinian side to receive the trucks because of safety concerns.

Israeli Fears of Hezbollah Attack

Speaking to ABC News, Jenny Linnel, a Rafah-based volunteer with the International Solidarity Movement, a Palestinian nonviolent resistance movement, said, "The Rafah border opens intermittently and for very brief moments of time, allowing a trickle of aid to come through."

The United Nations reported an increasingly dire situation in Gaza for Palestinian civilians. It said electricity had been cut off to 75 percent of the Strip's 1.5 million people, but the cutoff was now total. And 500,000 people had been cut off from a water supply.

While Israel weighs whether to expand its ground operations in Gaza, it also watches its northern border.

Israeli newspaper Haaretz reported that during the regular meeting of the Israeli Cabinet Sunday, Maj. Gen. Amos Yadlin, the head of military intelligence, said that Hezbollah, another anti-Israel Islamic group, might carry out a limited attack in the north.

Israel's defense forces have been on high alert across the country since the ground operation began Saturday and thousands of reservists are being called up in the event of any complications from the Gaza assault.

According to Haaretz, Yadlin told the Cabinet, "Hezbollah might carry out a low-profile attack by means of a Palestinian organization that would be limited and not set the border alight."

On the diplomatic front there are signs of movement. Egypt, whose government has refused to meet with Hamas leaders for the last month, is receiving a Hamas delegation today from Damascus, Syria, in Cairo. The trip appears to be timed to today's meeting between French President Nicholas Sarkozy and Egyptian President Hosni Mubarak in Egypt's Sharm al Sheikh.

Sami Zyara contributed to the reporting of this story from Gaza; Nasser Atta, Mimi Daher, Michal Mentch, Bruno Nota, Dana Savir contributed from Jerusalem; Lama Hasan and Angus Hines contributed from Rafah, Egypt.