Israeli troops and Hamas fighters battled in Gaza on Monday amid tank, artillery and air strikes, as Israel pressed on with its assault on Hamas and world leaders stepped up efforts to end the conflict.
French President Nicolas Sarkozy was due to arrive in Israel for talks on how to end one of its deadliest offensives in Gaza in decades, which has killed more than 515 Palestinians, dozens of them children.
Israeli infantry units backed by tanks and helicopters took up positions around Gaza City after effectively cutting the coastal strip into two by taking control of the main roads leading into the capital, witnesses said.
The troops exchanged fire with Hamas militants, fighting against the deepest Israeli thrust into Gaza since it unilaterally withdrew from the coastal territory more than three years ago.
The most intensive exchanges of fire were reported to be taking place in the north around Jabaliya and Beit Lahiya.
Palestinian medics said five children were killed in two separate Israeli strikes around Gaza City early on Monday.
At least 75 Palestinians have been killed since Saturday, when Israel upped a week-long bombardment of Hamas targets in Gaza by pouring in ground troops into the densely-populated territory.
Israel said one soldier was killed by a mortar shell on Sunday and another 55 were wounded since the start of the ground offensive.
Three civilians and one soldier have been killed by rockets fired from Gaza since Israel unleashed its "Operation Cast Lead" against Hamas on December 27.
In the same period, at least 517 Palestinians, including 87 children, have been killed and more than 2,500 wounded, according to Gaza medics.
Aid groups said the offensive had aggravated a humanitarian crisis for the 1.5 million residents of Gaza, most of whom depend on foreign aid in a territory that Israel has virtually sealed off since Hamas took control in June 2007.
Gaza residents currently have little electricity, no water and now face dire food shortages, aid groups say. Hospitals were only running on backup generators.
The Israeli government has fought off international pressure over its biggest military operation since its 2006 war in Lebanon.
Along with Sarkozy, EU and Russian delegations were expected in the region on Monday.
International efforts to halt the conflict sought new impetus after the UN Security Council failed to agree a statement on the conflict, with the United States giving strong backing to Israel.
France's Sarkozy was scheduled to meet Israeli Prime Minister Ehud Olmert in Jerusalem and Palestinian president Mahmud Abbas in Ramallah on Monday, after first meeting his Egyptian counterpart, Hosni Mubarak, in Cairo.
France hopes Egypt can rekindle its role as a mediator between Israel and Hamas.
Czech Foreign Minister Karel Schwarzenberg, whose country holds the rotating EU presidency, is heading a delegation to the Middle East, while Medvedev's Middle East envoy, Alexander Saltanov, was also on the way.
The European Union and Russia are both part of the Middle East diplomatic Quartet, along with the United Nations and the United States.
Israel unleashed "Operation Cast Lead" on December 27 in response to consistent rocket fire from Gaza into Israel.
Israel believes Hamas may be seeking "a respectable" way out of the conflict having underestimated the scope of the military offensive, Social Affairs Minister Isaac Herzog said.
He told CNN television Hamas was under "huge pressure" from the military operation.
"The intelligence reports that we've received today in the Israeli cabinet are that the Hamas is looking for a respectable way of finding a way to get out of this situation," he said.
The Israeli offensive has sparked spiralling anger in the Muslim world and protests across the globe.
The UN Security Council failed to agree a statement calling for a ceasefire in closed-door consultations late on Saturday.
That drew expressions of regret from UN chief Ban Ki-moon on Sunday, who said he would be working with key players to facilitate a consensus to bring about an end to the violence.
Hamas spokesman Fawzi Barhum condemned the Security Council action as "a farce" dominated by the United States, which has strongly supported Israel.