Israeli ground forces battled Hamas fighters in the Gaza Strip on Sunday after Israel stepped up its eight day operation to halt the Islamist group's rocket attacks on Israel.
Hours after tanks and infantry kitted with night-vision goggles crossed the border into the Hamas stronghold, battles raged in open areas east and north of Jabaliya and east of neighbouring Gaza City.
The heaviest fighting was reported around Jabaliya and Beit Lahiya in the north. Hamas fighters fired mortars and detonated roadside bombs.
A burning fuel depot lit up the night sky soon after troops crossed the border on Saturday, while warplanes swooped on dozens of targets.
Hamas said it had captured two Israeli soldiers during fighting in the Gaza Strip. But the Israeli army said it has no knowledge of any soldiers being captured.
Palestinian doctors said the death toll since the start of the air campaign on 27 December is now at least 470.
The Israeli army said that 30 of its soldiers have been wounded in the ground offensive, two of them seriously.
Sources inside Gaza say at least 20 people were killed in overnight fighting on Saturday, several of them civilians, and dozens were injured.
Israel said it called up 10,000 reservists and the military's chief spokesman estimated the operation in the Hamas-run territory could take "many long days".
The plight of the 1.5 million Palestinians crammed into the Gaza Strip was growing more desperate. People have taken shelter in their homes for days and humanitarian agencies warned that water, food and medical supplies were running short.
Hamas officials have said that any soldiers crossing into Gaza will face either capture or death. A spokesperson, Ismail Radwan, warned it will become a graveyard for Israeli troops.
Four Israelis have been killed by rockets that continue to pound southern Israel, where residents have been told to stay home and take cover in rooms made of reinforced concrete.
UN calls special meeting
The UN Security Council in New York - which was in emergency session for almost three hours - failed to reach an agreement on a statement on the situation in the Gaza Strip.
The council's president Jean-Maurice Ripert said no agreement was reached but there had been some convergence among member states.
Diplomatic sources told reporters that a US refusal to back a Libyan-drafted demand for an immediate truce had killed the initiative, since council statements must be passed unanimously.
The text by Libya, the only Arab member of the council, expressed "serious concern at the escalation of the situation in Gaza, in particular, after the launching of the Israeli ground offensive" and called on all parties "to observe an immediate ceasefire."
The United States, one of five permanent Security Council members, insists that any statement or resolution state that the Palestinian militant group Hamas is a terrorist organization that seized power in Gaza from the legitimate Palestinian Authority.
Libya and other Arab states oppose this, leaving the 15-nation Security Council deadlocked on the Gaza crisis.
The United States and Libya have clashed repeatedly on the Israeli-Palestinian issue since Libya joined the council a year ago.
In a telephone conversation with Israeli Prime Minister Ehud Olmert, UN Secretary-General Ban Ki-Moon called for an immediate end to the ground operation and voiced his "extreme concern and disappointment".
Israel occupied Gaza in the 1967 Middle East War after Palestinian uprisings formally ended its military rule in 2005, although it still controls the borders.
International peace efforts aimed at creating an independent Palestinian state foundered after Hamas won elections in 2006 and drove Fatah forces loyal to Palestinian President Mahmoud Abbas from Gaza a year later.
Hamas called off a six-month truce with Israel in December and stepped up the rocket attacks, complaining at Israeli raids into Gaza and a continuing blockade of the enclave.