The soldiers from the elite Golani Brigade were hit by shellfire from an Israeli tank and a number of other soldiers were wounded.

Intense diplomatic efforts are under way to resolve the crisis, but Israel has rejected calls for a ceasefire.

French President Nicolas Sarkozy, who is on a mission to the region, has appealed for a halt to the violence to allow in humanitarian aid.

According to Palestinian medical sources, more than 500 people have been killed and some 2,500 wounded since the Israeli operation began 10 days ago. These figures cannot be independently verified.

Five Israelis have been killed, including one soldier during the ground offensive.

'Mainly civilians'

There were reports of fierce fighting in northern Gaza as news began to emerge of the scale of the problems facing medical staff.

Norwegian doctor Mads Gilbert, one of two foreign doctors working at Gaza's biggest hospital, al-Shifa, said they had received a "new wave" of very serious injuries on Monday.

"We have many amputations, head injuries, and of course for a hospital in this situation... it's extremely difficult to handle," he told the BBC.

He warned that the hospital would be unable to operate much longer unless it received fresh medical supplies.

"People are dying now because of lack of supplies. We have all operating rooms full. Yesterday we were operating on two patients in one operating room... This is a complete disaster".

Israel has insisted that it is not targeting civilians and accuses Hamas of using civilians as human shields by operating in populated areas.

But Dr Gilbert said the overwhelming majority of casualties he had treated were civilians.

"Among all the hundreds we have seen so far, we have seen two fighters," he said, adding that women and children alone made up 25% of the death toll, and 45% of the wounded.

Civilians on the move

The Israeli army said it had hit 40 targets in Gaza on Monday, including smuggling tunnels and the homes of Hamas officials.

But information about what is happening is limited as Israel has barred foreign reporters from entering Gaza.

An Israeli army spokesman said three soldiers were killed and three were severely wounded when a tank shell hit a "structure" where the soldiers were located.

"Twenty additional soldiers were lightly to moderately wounded in the same incident," he added.

After night fell on Monday, Israeli troops were reported to be battling Palestinian militants on the outskirts of the northern Shujaiya district of Gaza City.

Hamas and Islamic Jihad said their fighters had engaged Israeli soldiers with machine guns and rockets. Residents reported hearing loud explosions and heavy gunfire.

One report said Israeli forces had to use artillery and helicopter gunships to drive back the Palestinian fighters.

Elsewhere, Israeli tanks were moving towards the Bureij refugee camp in central Gaza, according to the Reuters news agency. Fighting was earlier witnessed around Beit Hanoun and the Jabaliya refugee camp.

The BBC's Hamada Abu Qammar in Gaza City said residents on the outskirts were heading into the centre, seeking safe places away from the fighting.

Israeli Defence Minister Ehud Barak said Hamas had suffered a "hard blow", but insisted the offensive would continue.

"We still haven't reached our objectives," he told Israeli MPs.

A senior Hamas leader in the Gaza Strip, Mahmoud Zahhar, told Palestinians in a televised address that they were headed for "victory" against Israel.

Israelis "have legitimised the murder of their own children by killing the children of Palestine", he said.

The Israeli army said Palestinian militants had fired 20 missiles into southern Israel on Monday.

Humanitarian crisis

For the people of Gaza, living conditions are deteriorating sharply. Supplies of fuel, food, water, and wheat are said to be running desperately low.

A spokesman for Unrwa, the UN aid agency for the Palestinians, said food was urgently needed and people were facing "serious hunger", with supplies for just 48 hours.

"One million people are without electricity. Crucially the hospitals in Gaza are running on emergency generators. This in my book amounts to a humanitarian crisis," Christopher Gunness told the BBC.

Israel said it had allowed a convoy of 80 lorries carrying food and medicines through Gaza's southern frontier.

Away from the front line, diplomatic efforts to halt the fighting in the Gaza Strip have been moving into high gear.

French President Nicolas Sarkozy held talks with Palestinian leaders in the West Bank town of Ramallah at the start of a series of meetings across the Middle East.

In remarks broadcast on French radio, he "condemned" the Israeli ground offensive, but said Hamas had also "acted in an irresponsible and unforgivable manner" by ending a six-month ceasefire with Israel and resuming firing rockets.

US President George W Bush also blamed the current situation on Hamas militants and said he understood "Israel's desire to protect itself".

An EU delegation held talks with Israeli Foreign Minister Tzipi Livni in Jerusalem, calling for a "cease-fire at the earliest possible moment".

But Ms Livni appeared to rebuff the call, saying: "When Israel is being targeted, Israel is going to retaliate."

At the UN in New York, Arab ministers are pushing for a resolution calling for an immediate ceasefire in Gaza.

Palestinian Authority President Mahmoud Abbas is expected to attend a meeting of the UN Security Council on Tuesday to discuss the situation.

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