Artillery pounds Gaza Strip and rockets rain on Israel as hope for ceasefire fades

Hopes that a ceasefire ending the bloody seven-day conflict in the Gaza Strip would be declared last night faded as a deadline passed without an expected announcement by Egyptian officials. The violence has claimed the lives of at least 139 Palestinians and five Israelis, and left nearly 1,000 injured.

"An agreement for calm has been reached. It will be declared at 9pm and go into effect at midnight," Hamas official Ayman Taha told Reuters from Cairo, where diplomatic efforts have been focused, but the deadline passed without an announcement. There were hopes pressure from US Secretary of State Hillary Clinton, who arrived in Jerusalem late last night, might help seal the deal.

Israeli warplanes and artillery continued to pound the Gaza Strip, left, while Hamas launched dozens of rockets into Israel yesterday as a team of international diplomats converged on Cairo and Jerusalem to press both sides into a truce.

Details emerging from the Egyptian-brokered plan suggested a two-year ceasefire guaranteed by a joint Egyptian-US-Israeli mechanism. Hamas wanted an immediate, unconditional truce and the opening of Gaza's borders. Israel insisted on a long-term agreement underwritten by international guarantors.

As darkness fell on the seventh day of violence, both sides appeared to be pressing hard right up to the possible cessation of hostilities.

Hamas launched repeated barrages of rockets, including an M-75 missile aimed at Jerusalem that nearly hit the Palestinian city of Bethlehem.

An 18-year-old Israeli soldier was reported to have been killed while a civilian was seriously injured when rockets struck a shop and an apartment building in Ashkelon.

Israel dropped thousands of leaflets on northern Gaza instructing locals "for your own safety to evacuate your residences immediately and move towards central Gaza city" – an apparent prelude to an extended aerial or ground operation against rocket launchers in the area.

The Israeli army said it targeted "11 terrorist squads," 30 underground rocket launchers and a safe house containing weapons and ammunition. Other targets included the Islamic Bank and smuggling tunnels.

"We are not looking for a ceasefire," said the Israeli Environment Minister Gilad Erdan. "What we are trying to advance today is to achieve long-term quiet and security."