Bombs rain down as peace deal accepted 'in principle'

Residents in southern Gaza told to leave homes as Israel prepares to widen offensive

The first tentative hope of an end to the war in Gaza came yesterday when Israel said it accepted "the principles" of a French-backed Egyptian peace plan providing for international action to stop Hamas militants smuggling arms.

Israel, nevertheless, resumed its 12-day-old offensive against Hamas last night, which Palestinian medics say has killed 688 Palestinians, after halting it for three hours to allow humanitarian and medical aid into Gaza. The military said it may halt ground operations for three hours a day.

As witnesses reported tanks on the move close to the border parallel to the southern town of Khan Yunis, Israel began new air strikes against smuggling tunnels in Rafah after warning local residents to leave their homes. It was claimed that an Israeli airstrike destroyed a mosque in Gaza City, injuring at least 15 worshippers.

Amos Gilad, the top official in the Israeli Defence Ministry, flies to Cairo today for negotiations. It is clear Israel is seeking tough assurances on the strength and practicalities of any future international force on the Egypt/Gaza border before agreeing to end the war.

French President Nicolas Sarkozy appeared to jump ahead of events by announcing his "delight" that Israel and the Ramallah-based Palestinian Authority, loyal to President Mahmoud Abbas, had accepted a new peace plan.

Israel's security cabinet opted to continue pursuing its offensive, which yesterday resulted in the deaths of an estimated 29 Palestinians.

The UN said civilians continued to "bear the brunt" of the ground operation which started on Saturday night. The Palestinian Centre for Human Rights in Gaza said 130 children aged under 16 had been killed. Seven Israeli soldiers have died during the offensive.

With Cabinet ministers reportedly deferring a decision on whether to deepen the offensive by moving further into inner-city areas to engage with the Hamas militants, Maj-Gen Gilad told Israel's Army Radio the Gaza operation was "at a crossroads".

The Egyptian foreign minister, Ahmed Aboul Gheit , attending a deadlocked UN Security Council New said that the plan in Cairo was to forge a "temporary ceasefire that would lead to a consolidated, permanent ceasefire". He said he was unable to confirm whether Hamas intended to send a team to Cairo today.

Amid reports a Turkish force was being considered to bolster border security as part of the peace plan, Mark Regev, the spokesman for Israeli Prime Minister, Ehud Olmert, said the plan's success depended on the international community as well as Israel.

With 800,000 Gazans now without running water, the World Bank called on Israel to allow emergency fuel distribution to 170 halted water and sewage pumps and warned that 10,000 residents could be at risk of drowning if a combination of explosions and heavy rain resulted in the failure of Beit Lahiya sewage lake.

The exact details of what appears to have been one of the worst attacks of the war – the shelling on Monday of a compound in the Zeitoun district of northern Gaza City in which about 100 members of the Al Samoun family had taken shelter – are yet to emerge.

The Israeli human rights organisation B'Tselem said a paramedic who had reached the compound during the ceasefire reported the removal of three bodies and 14 injured people but that about 16 bodies remained inside.

About 12 bodies were removed on the day of the day of the attack, making the paramedic's report broadly consistent with reports that more than 30 people were killed. However B'Tselem said some family members were now saying the death toll was lower. Others have suggested that it is even higher.

From a hilltop half a mile from the northern Gaza border, near Sderot, the resumption of the bombardment could be seen and heard about 15 minutes after the designated 4pm end to the ceasefire. Helicopters hovered in the air above the Strip, plumes of heavy smoke rose from some of the areas under attack and the trails left by two rockets fired by militants could be seen against the sky as the sun sank.

At the UN, diplomats manoeuvred to avoid the tabling of a Libyan-drafted ceasefire resolution that would be almost certain to provoke a veto by the United States for failing to mention the Hamas arms smuggling.

British officials suggested the the 15 Security Council members may agree a compromise text just short of a resolution to avert a public split. They said this would not preclude negotiations on a full-blown resolution, with the ceasefire initiative put forward by Egypt as its likely basis.

Condoleezza Rice, the US Secretary of State, delayed her return to Washington to stay in New York and meet with counterparts from the Middle East and Europe, including Foreign Secretary David Miliband.

Mr Miliband said: "I've seen the first glimmerings of the possibilities of a ceasefire... we've got to try and make sure the action on the ground led by President Mubarak and the diplomatic work here in New York come together."

Army admits there was no firing from school

The Israeli army has admitted privately to the UN that no firing came from a Gaza school where 42 people died on Tuesday after being hit by Israeli mortars, officials of the United Nations Relief and Works Agency (Unrwa) disclosed last night.

Publicly, the Israeli army claims that the school, which was providing shelter for around 350 people, was being used by Hamas fighters to carry out attacks. Unrwa officials said they were fully confident this was not the case.

More than 20,000 mourners attended the funerals of the victims yesterday. The attack was the single biggest loss of civilian life since the Israeli onslaught began. Mourners chanted slogans against "aggressors" and "murderers" and called for Israeli government leaders to be tried for war crimes. The procession went from the Kamal Adwan Hospital, where the casualties were taken, to the Al-Fakhora school.