Israel's offensive on Gaza ploughed on into its 21st day on Friday after new deadly strikes that set ablaze the enclave, while diplomatic efforts gathered pace and Hamas offered a conditional truce.
The Israeli army said it will lock down the occupied West Bank for 48 hours as Hamas called for a day of "wrath" on Friday against the offensive on Gaza, as the death toll soared.
Gaza medics said that 1,105 Palestinians have been killed since Israel launched Operation Cast Lead on December 27, including 355 children, with at least 5,130 people wounded.
At least 50 Palestinians were killed in fighting on Thursday, including a top Hamas leader, as tanks pressed into the heart of Gaza City setting landmark buildings ablaze, including a hospital filled with refugees.
Said Siam, interior minister in Gaza's Hamas government, was slain along with his brother and son in an air strike on the brother's house north of Gaza City, Hamas said, as its armed wing vowed to avenge his death.
A Hamas hardliner, Siam had created the Executive Force, a militia that played a key role in the Islamist takeover of Gaza in June 2007. He is the highest-ranking Hamas official killed since Israel unleashed its offensive.
He was killed in a day of fierce fighting in which Israeli tanks rolled into the centre of Gaza City and forces struck a hospital, a media building and a UN compound, setting ablaze a warehouse filled with food aid.
A tide of terrified civilians, many gripping wailing children, fled the advancing Israeli troops as warplanes pounded the impoverished enclave in a bid to stem Palestinian rocket fire.
Hundreds of people took shelter in the Al-Quds hospital in Gaza's Tel al-Hawa neighbourhood but after nightfall they were forced to flee the facility engulfed in flames.
Patients who had been wounded in the fighting could be seen struggling to get out of their beds only to head out into an icy night pierced by gunfire, according to an AFP photographer.
At least three babies in incubators and three people on life support were wheeled out into the flame-lit streets.
Despite the onslaught, Gaza militants continued to rain rockets and mortar rounds on southern Israel, where 25 projectiles crashed on Thursday wounding five people, one of them seriously, the army and medics said.
On the diplomatic front, Egypt pressed ahead with Western-backed efforts to end the war in which an estimated 600 Palestinian civilians have been killed.
Israeli negotiator Amos Gilad held four hours of talks with Egyptian intelligence chief Omar Suleiman on Cairo's plan for a truce on Thursday before heading back home to report to the Israeli leadership.
In what could be a major breakthrough, Israeli Prime Minister Ehud Olmert said Foreign Minister Tzipi Livni would travel to Washington to sign a memorandum on joint efforts to halt smuggling beneath the Gaza-Egypt border.
Shutting down the hundreds of tunnels beneath the frontier that form Hamas's main resupply route was one of Israel's chief war aims.
Olmert's office also announced that top negotiator Gilad was going back to Cairo on Friday for more talks with Egyptian authorities on a truce plan.
Egyptian officials said earlier that Gilad responded "favourably" to Cairo's plan for a ceasefire.
The Damascus-based deputy head of Hamas's powerful politburo, Mussa Abu Marzuk, also told AFP the Islamists were ready to accept a one-year renewable truce if Israel pulled its troops from Gaza.
Hamas was waiting for the Israeli reply, Abu Marzuk said, adding that the offer was also conditional on Israel's lifting of the crippling blockade it has imposed on Gaza since the Islamists took control of the enclave in 2007.
UN chief Ban Ki-moon arrived in Israel on Thursday just before an Israeli tank shell hit the UN refugee agency's main Gaza compound, wounding three employees and torching a warehouse filled with tens of millions of dollars worth of aid.
Ban, who is on a regional tour to push for a ceasefire in Gaza, conveyed his "strong protest and outrage" amid a chorus of international condemnation.
US Secretary of State Condoleezza Rice also said she spoke to the Israeli leadership about the "difficulties" caused by the shelling of the UN compound and described the incident as "unfortunate."
Olmert said that Israeli troops had shelled the UNRWA compound in Gaza in response to fire coming from the building charges denied by the UN refugee agency.
Israel also came under fire at an emergency UN meeting. "Gaza is ablaze. It has been turned into a burning hell," said Nicaragua's Miguel d'Escoto Brockmann, president of the 192-member UN General Assembly.
"The violations of international law inherent in the Gaza assault have been well documented: collective punishment; disproportionate military force; attacks on civilian targets, including homes, mosques, universities, schools."
Israel says 10 of its soldiers and three civilians have died as a result of combat or rocket fire since December 27.