Israel has bombarded the southeast of Gaza, killing more than a dozen people and forcing residents to flee, as the death toll since the fighting began in Gaza rose to to 693 and diplomats tried to find a solution to the conflict.
Sources and witnesses told Al Jazeera that Israel had bombed the areas of Khuzaa, Bani Suhaila and Absan, near Khan Younis, killing at least 17 Palestinians and injured dozens, as it attacked Hamas fighters.
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Hundreds of people were seen fleeing their homes in eastern Khan Younis as the battle unfolded, flooding into the streets with what few belongings they could carry. Many had children in tow.
"The airplanes and airstrikes are all around us,'' said Aziza Msabah, a resident. "They are hitting the houses, which are collapsing upon us."
Residents who fled Khuzaa, a rural area, said that families were trapped and Israeli snipers had taken up positions on top of buildings.
"Ambulances are having hard time to get to the wounded in Khuzaa since the fighting is still going on," said Al Jazeera’s Nicole Johnston said, reporting from Gaza.
"Tank shells were landing on the roads out of the area," she added, making it difficult for anyone to enter or leave.
The death toll in Gaza has now reached 693 in 16 days of Israeli attacks, which more than 4,000 people wounded. The number of Israelis who have died is 31 - 29 soldiers and two civilians.
Gaza residents also said on Wednesday that Israel attacked the power station which provides electricity to half the population of Gaza. The attack means only 10 percent of Gaza has access to electricity.
John Kerry, the US secretary of state, said that diplomats had made progress on negotiating a ceasefire, after meeting the Palestinian president Mahmoud Abbas and Ban Ki Moon, the UN secretary-general.
"We have certainly made some steps forward. There is still work to be done," Kerry said shortly after flying into Israel.
"The UN is wholeheartedly in this effort to try to see if we can advance not just a ceasefire but a sustainable process of going forward, which is very important."
He met Abbas in the West Bank and Ban in West Jerusalem.
Meshaal demands siege lifted
Later on Wednesday, Khaled Meshaal, the leader of Hamas' political bureau, said the group rejected a ceasefire to end the conflict unless Israel's blockade on the Gaza Strip was lifted.
"We cannot accept any proposal that does not include the lifting of the siege on Gazans," Meshaal said in Doha. "Our least demand is the siege on Gaza to be lifted."
Al Jazeera's James Bays, reporting from West Jerusalem, said that Kerry was at the forefront of intense diplomatic traffic on the crisis, but both sides were still opposed on the terms of a ceasefire.
Israel has no interest in concessions on the blockade, Bays said. "They want an unconditional ceasefire, and then negotiations somewhere along the road."