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Palestinians flee their neighbourhood during heavy Israeli shelling in Gaza City on SundayFINBARR O'REILLY/Reuters

Israeli forces greatly expanded their offensive against Palestinian militants in Gaza Sunday in the bloodiest day yet of this two-week-old conflict that seeks to weaken Hamas, the leading resistance movement, and to push it to halt its aggressive rocket fire against the Jewish state. But Hamas, to the surprise of many, pushed back hard, serving notice it could not be taken for granted.

At least 100 Palestinians were killed in fighting across the Gaza Strip, along with 13 Israeli soldiers – the most Israeli troops lost in a single day since the 2006 War in Lebanon. As well, Hamas said it had captured an Israeli soldier, a development Israel has not yet confirmed.

The majority of both Palestinians and Israelis were killed in one community, the border town of Shejaia, the battle for which will long be remembered for its carnage and for the flight of tens of thousands of its citizens – an exodus of biblical proportions.

The Israeli army said it was targeting the neighbourhood because it was a hotbed of Hamas activity.

Several of the hidden Hamas tunnels discovered by Israel in the past three days were found to lead back to Shejaia, which sits between one and two kilometres from the Israel frontier, and almost 10 per cent of all rockets fired against Israel during this conflict are said to have come from there.

Beginning shortly after sunset Saturday evening – the end of the Jewish Sabbath – Israeli ships, artillery and tanks began pounding the community with shells, trying to hit some of the known concentrations of Hamas fighters.

Hamas, however, showed unexpected mettle in battling the invaders, something it had not done when Israeli forces last invaded Gaza in 2008-2009.

"As we moved into Shejaia, we were met by anti-tank missiles, RPGs [rocket-propelled grenades], heavy extensive weapons fire at the forces from the houses, from the surrounding buildings," said Lieutenant-Colonel Peter Lerner, spokesman for the Israel Defence Forces.

Seven of Israel's 13 fatalities were said to have occurred there when an armoured personnel carrier was hit by anti-tank fire. Others were killed setting up positions inside houses of which they took control. All 13 fatalities were members of Israel's elite Golani Brigade.

The presence of militant fighters in Shejaia became clear Sunday afternoon when, under the cover of a humanitarian truce intended to allow both sides to remove the dead and wounded, several armed Palestinians scurried from the scene.

Some bore their weapons openly, slung over their shoulder, but at least two, disguised as women, were seen walking off with weapons partly concealed under their robes. Another had his weapon wrapped in a baby blanket and held on his chest as if it were an infant.

The shelling of Shejaia took its toll of the civilian population there. While the Israelis had warned citizens two days earlier to leave, many had refused in large part because Hamas said it expected people to remain.

By first light Sunday, Israeli tanks began advancing, shelling as they went and the people began streaming out of the neighbourhood by the thousands with little more than the clothes on their backs.

They crossed Saladin Street, part of the great Cairo-Beirut road that runs down the spine of the Gaza Strip, entered Gaza City and kept on walking toward the sea.

Many said they didn't know where they were headed, just away from the shelling and Hamas.

At Shifa Hospital in downtown Gaza, the emergency room was overflowing with victims brought in throughout the night.

Outside the emergency room, Aish Ijla, 38, lay on a bench, his left leg wrapped in a wet new cast from his foot to his hip. "I'm not sure how it happened," Mr. Ijla said. "One minute we were sitting there worrying, and the next, boom, and my leg was torn up."

Naser Tattar, the hospital's director, told journalists that 17 children, 14 women and four elderly people were among the 62 dead from Shejaia. About 400 people, he added, had been wounded in the Israeli assault

The head of the Cairo-based Arab League, Nabil el-Araby, described the Israeli attack as "a war crime against Palestinian civilians and a dangerous escalation."

IDF chief of staff Benny Gantz said: "It hurts me to see wounded children and wounded women." But, he added, the people of Shejaia "should know that they are victims of Hamas setting up in their areas.

"We will continue to act until we achieve the totality of our aims."

Throughout the day, hundreds of people from Shejaia sat out on the lawn behind Shifa hospital, as if it was some massive picnic, and refused to leave, believing it to be one of the few places where they would be safe.

United Nations schools filled up quickly with people seeking refuge.

Robert Turner, head of the UN Relief Works Agency in Gaza, said he expected as many as 85,000 people to find shelter by Sunday night (about 5 per cent of the Gaza Strip's population). He said his facilities were running out of things such as mattresses and hygiene kits and that the UN was now diverting supplies intended for Syria to Gaza.

Efforts to arrive at a negotiated ceasefire in this conflict failed last week when Hamas dismissed an Egyptian proposal that called merely for each side to stop fire and to enter into negotiations to settle other matters. Israel accepted the truce.

Hamas's deputy political chief Mousa Abu Marzook said Hamas would sooner have Israel reoccupy the Gaza Strip than return the territory to the status quo before this conflict.

Any ceasefire that doesn't include the opening of border crossings in and out of Gaza is a complete non-starter, he said.

"We're not asking for the moon," one man said this week in Khan Younis. "We just want to live in dignity like a proper country anywhere."

In an effort to close the gap between Hamas's demands and Egypt's ceasefire proposal, Palestinian president Mahmoud Abbas was to meet late Sunday in Qatar with Hamas's political leader Khaled Meshaal.

Mr. Abbas declared three days of mourning in Palestine for the victims Sunday and called on the UN Security Council to hold an emergency session over what he called the "massacre in Shejaia."

U.S. Secretary of State John Kerry is scheduled to arrive in Cairo Monday to lend his weight to efforts at reaching a ceasefire.

Mr. Kerry said Sunday Israel "has every right in the world to defend itself" from attacks by Hamas militants in Gaza, but he won no friends in Israel when he was heard over an open microphone making a sarcastic remark about Israel's efforts at conducting "pinpoint operations" to avoid collateral damage during this conflict.

When looking at the reports of large loss of life in Shejaia, he mockingly described the attack as "a hell of a pinpoint operation."

UN Secretary-General Ban Ki-moon arrived in Qatar Sunday and will spend the next few days touring the region in an effort to promote a speedy settlement.

Hamas, however, is in no rush.

Though more than 400 Gazans have been killed in the first two weeks of this war, Hamas seems prepared to slug it out with the Israelis in order to show their determination. They believe that Israelis are particularly averse to burying their soldiers. The 18 who now have been killed exceeds by seven the total number who lost their lives in the 22-day 2008-2009 war.

A few more days such as Sunday, they believe, will have the Israelis ready to make a deal. Taking into account the possibility that Hamas may have captured an Israeli soldier, the group may well seek to increase its demands.

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