Witnesses said on Thursday that tanks moved into northern Gaza, widening Israel's largest military operation in the year since it pulled out of the seaside territory.
Adding to the tension, a Palestinian militant group claimed on Thursday that it had killed an 18-year-old Jewish settler kidnapped in the West Bank. Palestinian security officials said they believed the body of Eliahu Asheri had been found in the West Bank city of Ram Allah.
Hamas officials said more than 30 lawmakers have been arrested in the West Bank.
Palestinian security officials said Israeli forces detained Nasser Shaer, the Palestinian deputy prime minister, and three other Cabinet ministers, as well as four lawmakers in Ram Allah. Several others were arrested in the town of Jenin, they said.
Israeli media reported a roundup of Hamas lawmakers in Jerusalem and other locations. Also, the Hamas mayor of the West Bank town of Qalqiliya and his deputy were detained, security officials said.
The Israeli military refused to comment. Israel blames Hamas for the Sunday attack in which two soldiers were killed and a third captured when militants tunnelled under the border and attacked an army post, setting off the invasion.
According to the witnesses, before daybreak on Thursday, Israeli tanks and bulldozers moved into northern Gaza, stopping about 200m inside Palestinian territory across from the Jabaliya refugee camp. No clashes were reported. But the military denied its forces had moved into northern Gaza.
Despite the size of the Israeli operation, with large troop movements, artillery barrages and many air strikes over two days, no one was hurt.
Israel held the Palestinian government, headed by Hamas, responsible for the fate of the soldier. It also blamed the Hamas leadership in exile in Syria.
An Israeli Cabinet minister said Khalid Mishaal, the Syria-based Hamas leader, was a target for assassination. In a bold warning to the country that shelters him, Israeli warplanes buzzed the seaside home of Bashar Assad, the Syrian president, in the port of Latakia.
Israel says Khalid Mishaal is a
target for assassination
Syria confirmed that Israeli warplanes entered its airspace, but said its air defences forced the Israeli aircraft to flee.
Israel's concern goes beyond the rescue of the soldier and the negative precedent abducting soldiers would set. Ehud Olmert's government is alarmed by the firing of homemade rockets at Israeli communities around Gaza and support for Hamas in the Arab world, especially from Syria.
Earlier, witnesses reported heavy shelling around Gaza's long-closed airport, and Israeli missiles hit two empty Hamas training camps, a rocket-building factory and several roads.
Palestinians filled up on basic supplies after warplanes knocked out electricity, raising the possibility of a humanitarian crisis. The Hamas-led government's information ministry warned of "epidemics and health disasters" because of damaged water pipes to central Gaza and the lack of power to pump water.
In Rafah, Nivine Abu Shbeke, a 23-year-old mother of three, hoarded bags of flour, boxes of vegetables and other supplies.
"We're worried about how long the food will last," she said. "The children devour everything."
The Israeli move has raised the
spectre of a humanitarian crisis
Dozens of Palestinian militants - armed with automatic weapons and grenades - took up positions, bracing for attack.
Olmert, the Israeli prime minister, threatened harsher action to free the soldier, though he said there was no plan to re-occupy Gaza. Mahmoud Abbas, the Palestinian president, deplored the incursion as a "crime against humanity".
Abbas and Egyptian dignitaries tried to persuade Assad to use his influence with Mishaal to free the soldier, Corporal Gilad Shalit. Assad agreed, but without results, said a senior Abbas aide. Israel refused to negotiate with the militants and rejected their demand - freeing Palestinian prisoners - outright.
The US pressure
The Popular Resistance Committees (PRC) in Gaza said they had killed Asheri, kidnapped in the West Bank. Palestinian security officials said the body had been found, and Israeli security sources said the youth had apparently been killed. The PRCs had said it would execute the hostage if Israel did not halt its invasion of Gaza.
Also, militants said they kidnapped another Israeli, and police said they had a missing person report about a 62-year-old Israeli from the central Israeli city of Rishon Lezion.
The US kept up pressure on Israel
and Hamas to show restraint
Meanwhile, the European Union on Wednesday urged both Israel and the Palestinians to "step back from the brink" and, echoing a statement from Condoleezza Rice, the US secretary of state, to give diplomacy a chance.
The White House kept up its pressure on Hamas, saying the Palestinian government must "stop all acts of violence and terror". But the US also urged Israel to show restraint.
Kofi Annan, the UN secretary-general, urged restraint in a phone call to Olmert, saying he had spoken to Assad and Abbas and asked them to do everything possible to release the soldier. Amr Mussa, the Arab League secretary-general, called on the US to assume its role as "honest broker" and to make the Palestinian-Israeli conflict its top priority in the Middle East.