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Israel stepped up its assault on Hamas militants in the Gaza Strip last night as Western diplomats closed in on Jerusalem, determined to bring an end to the conflict.

Israeli troops and Hamas militants fought their first major battles in Gaza City last night, Israeli and Palestinian sources said. Large explosions and heavy exchanges of gunfire emanated from the Shejaiya neighbourhood in the eastern part of the city.

Israeli military ambulances and helicopters were seen moving toward the area. Israel's Channel Two television reported that the total number of armed Palestinians killed in gun battles with Israeli forces had reached 100.

International journalists have been prevented by Israel from entering Gaza, but Palestinian and medical sources inside the strip report that more than 550 Gazans have been killed and 2,500 injured since Israel launched its attack on Hamas 10 days ago. Hospital sources in Gaza say that 90 of the fatalities, all civilian, had occurred in the past two days, since Israel began a ground invasion.

Four Israelis have been killed by Hamas rockets in the past 10 days, and dozens injured. Israeli officials said 30 rockets landed in Israel yesterday, including several in the port cities of Ashkelon and Ashdod, but that no one was seriously injured.

Three Israeli soldiers were killed and about 20 were wounded - four seriously - by an Israeli tank shell fired in error during fighting in the Gaza Strip, the military said today.

As fighting raged last evening in Gaza, French President Nicolas Sarkozy was dining with Israeli President Shimon Peres before going on to meet with Israeli Prime Minister Ehud Olmert. The sessions capped a long day by the French leader, who has taken the lead in efforts to bring about an end to the current fighting and establish a durable, longer-term truce. He met in the morning with Egyptian President Hosni Mubarak in Cairo and in the afternoon with Palestinian Authority president Mahmoud Abbas in Ramallah.

Crisscrossing with him during the day was former British prime minister Tony Blair, now the special envoy of the Quartet (the United States, European Union, Russia and the United Nations), and a separate EU delegation led by its foreign minister, Javier Solana.

Mr. Sarkozy was blunt about whom he considered to be at fault for the current conflict. While calling on Israel to immediately cease its military operations, he said that "Hamas is to blame for the suffering of the Palestinians." It "acted in an irresponsible and unforgivable manner."

Even Washington has gotten into the ceasefire game. President George W. Bush said he understood why Israel had turned its guns on Hamas and insisted that "any ceasefire must have the conditions in it so that Hamas does not use Gaza as a place from which to launch rockets."

State Department spokesman Sean McCormack said the United States was pressing for a ceasefire that would include a halt to rocket attacks and an arrangement for reopening Gaza's border crossings, the chief demand of Hamas. He added that the tunnels from Gaza to Egypt, through which Hamas had smuggled arms, was an additional matter that any ceasefire would have to address.

For its part, Israel's Foreign Minister, Tzipi Livni, rejected calls for an immediate ceasefire. "We are fighting with terror and we are not reaching an agreement with terror," Ms. Livni stated after talks with the EU delegation.

Israel, she said, would no longer be party to a situation in which "Hamas targets Israel whenever it likes and Israel shows restraint.

"When Israel is being targeted, Israel is going to retaliate," she said.

Since Israel began its ground assault Saturday night, most of the dead and wounded arriving at Gaza's main hospital, Shifa, have been civilians, hospital official Hammam Rasman said. Yesterday, more than 150 patients were brought to the already overcrowded hospital. Forty bodies also were brought in.

Mr. Rasman said Shifa and other overwhelmed hospitals were in danger of shutting down. With no electricity being supplied, all were dependent on overworked generators that will run out of fuel in a few days. Seventy people, including 20 infants on life-support systems, would be imperilled, he said.

Mats Gilbert, a Norwegian volunteer doctor at Shifa, described the situation as a "complete disaster."

There are not enough doctors, not enough operating rooms, to handle the crush of victims, he said. "People are dying waiting for surgery."

The humanitarian crisis has ignited the recent round of intense diplomacy, and a meeting of the UN Security Council has been moved ahead to tonight .

Eric Chevalier, a spokesman for the French Foreign Ministry, said France, which currently holds the presidency of the Security Council, was working hard to bridge the gap between an Arab League proposal that blamed Israel for the conflict, and the U.S. position that blamed Hamas.

Regardless of who is to blame, a consensus appears to be developing that any resolution would: end Israel's assault; stop Hamas's rockets; open Gaza's border crossings; close all smuggling routes into Gaza; and involve international monitors in some capacity.

Israel would like to see added a clause that provides for the release of Gilad Shalit, the Israeli soldier abducted and taken into Gaza more than 2½ years ago.

Crucial to the opening of Gaza's border crossings will be the deployment of border guards from the Palestinian Authority of Mr. Abbas, the elected, officially recognized head of the Palestinian people.

Mr. Abbas, who works from Ramallah in the West Bank, made it clear he would be happy to provide such border officials, but said the PA will not use Israel's assault in the Gaza Strip to return to the Hamas-ruled territory.

"It is unthinkable we would work to have Hamas destroyed in order to take its place. We reject reunifying our homeland through violence," he said.

With a report from Orly Halpern in Ashkelon