Israeli tanks and troops surged into towns across the Gaza Strip on Tuesday striking Hamas targets, but hits on three UN-run schools killed at least 45 people sparking urgent new ceasefire calls.
Israeli troops fought Islamist militants around the back alleys of Gaza's main city in the heaviest fighting of the 11-day-old offensive aimed at halting rocket attacks, but Hamas still made its deepest rocket strike yet into Israel.
As the Palestinian death toll hit 635, Arab nations pressed for a UN Security Council resolution condemning the onslaught, but Israel rejected ceasefire calls by French President Nicolas Sarkozy and other leaders.
"Europe must open its eyes," President Shimon Peres told an EU ministerial delegation that demanded a truce.
"We are not in the business of public relations or improving our image. We are fighting against terror and we have every right to defend our citizens."
The United Nations demanded an investigation after tank and air assaults hit three UN-run schools -- killing at least 45 people who had taken shelter in one at the Jabaliya refugee camp in northern Gaza.
Earlier, two people were killed when an artillery shell slammed into a school run by the UN Palestinian relief agency, UNRWA, in the southern city of Khan Yunis. Three people were killed in an air strike on a school in the Shati refugee camp in Gaza City, medics said.
The UN Humanitarian Coordinator for the Palestinian territories, Maxwell Gaylard, said Israel had the GPS coordinates of all UN buildings in Gaza -- including its schools.
"Neither homes nor UN shelters are safe" for civilians, he said in a statement which reaffirmed UN ceasefire calls.
"These tragic incidents need to be investigated, and if international humanitarian law has been contravened, those responsible must be held accountable."
Heavy fighting raged in parts of Gaza City and around nearby Deir al-Balah and Bureij. One air strike killed 12 people -- including seven children -- from the same family in Gaza City.
Tanks backed by helicopter gunships rolled into Khan Yunis before dawn, to be met by return fire from Hamas and its allies, witnesses said.
Four Israeli soldiers were killed in two friendly fire incidents during the overnight surge in fighting, the army said. Five have now died since Saturday.
The army said soldiers opened fire at one suicide bomber approaching them and detonated his belt with their bullets.
Around 12 Hamas rockets were fired over the border, one landing 45 kilometres (28 miles) inside Israel -- the deepest yet -- and lightly wounding a baby, the military said.
Three civilians and one soldier have been killed by rocket fire inside Israel since the offensive began.
Protests against Israel have spiralled worldwide and the French president has led new calls for a truce.
"We, Europe, want a ceasefire as soon as possible," Sarkozy said in Jerusalem on Monday. "The weapons must be silenced and there must be a temporary humanitarian truce."
But Israeli Prime Minister Ehud Olmert vowed that the campaign will continue until Hamas's ability to fire rockets into Israel is wiped out.
Sarkozy went on to Damascus and said he would return to Egypt on Tuesday for more talks on achieving a ceasefire.
Olmert and Sarkozy agreed the French leader should pursue a peace deal involving Egypt which brokered a six-month truce that ended on December 19. Hamas refused to renew the deal and started firing rockets, sparking the war.
Israel launched Operation Cast Lead on Hamas on December 27 with a massive air bombardment of Gaza, and sent in thousands of ground troops a week later.
Since then, 635 Palestinians have been killed, including more than 160 children, with more than 2,700 wounded, Gaza medics say.
Israel has denied that a humanitarian crisis exists in Gaza, but the International Committee of the Red Cross said there is a "full-blown" crisis and people are dying because ambulances cannot reach them.
"There is no doubt in my mind that we are dealing with a full-blown and major crisis in humanitarian terms. The situation for the people in Gaza is extreme and traumatic," said Pierre Kraehenbuehl, the ICRC director of operations in Geneva.
He said ICRC staff in Gaza described the past night as "the most frightening to date" in the territory where there is no power or water and finding food is a daily struggle.
Israeli officials have insisted they are doing everything to prevent civilian casualties and have blamed Hamas for operating from civilian areas.
The UN Security Council was to meet again on Tuesday to weigh an Arab call for an immediate ceasefire and for protection of Palestinian civilians, diplomats said.
US Secretary of State Condoleezza Rice was to attend the meeting with foreign ministers from the major powers and Arab nations.
The United States has strongly backed Israel's operation, with President George W. Bush saying any truce must ensure an end to militant rocket fire.
