Israel expands Gaza offensive after rocket fire

GAZA, July 6 (Reuters) Israeli forces seized control of former Jewish settlements in the northern Gaza Strip on Thursday, effectively carving out a buffer zone after Hamas Islamist militants fired rockets into a major Israeli city.

Prime Minister Ehud Olmert ordered the expansion of the Gaza offensive, which began last week with the main goal of bringing home a captured soldier, after rockets hit Ashkelon, 12 km (7 miles) inside Israel.

Backed by fire from helicopter gunships, tanks moved into the rubble of three of the 21 Jewish settlements evacuated when Israel left Gaza last summer after 38 years of occupation. Rockets are often fired from the former settlements.

One Hamas militant was killed in an air strike in northern Gaza after the troops moved in. Palestinian gunmen took up positions and planted bombs, preparing to confront the Israelis.

Israeli political sources said Olmert had effectively decided to carve out a buffer zone to halt rocket attacks, but the prime minister's office said the offensive would not amount to re-occupying parts of the strip long-term.

Rockets hit Ashkelon, a city of 115,000, on Tuesday and Wednesday. It was the furthest point hit by the makeshift missiles, which cause few casualties but spread panic.

The stepped-up incursion in northern Gaza has intensified pressure on the Hamas-led government, already facing Israeli threats of reprisals over the abduction of Corporal Gilad Shalit on June 25.

Hamas gunmen were among those who seized him.

The Israeli army said that troops had begun moving into northern Gaza early on Thursday, but gave no further details. A smaller force had been operating in the zone since last week.

''GAZA SWAMP'' ''We won't sink in the Gaza swamp, but will enter any necessary area to carry out our missions,'' Defence Minister Amir Peretz said in a speech at a naval base on Wednesday.

The Gaza violence has dampened enthusiasm for Olmert's plan to give up some isolated settlements in the occupied West Bank, while strengthening the main blocs there. Olmert's opponents say the lesson from Gaza is that giving up land may not bring peace.

Palestinians seek at least the West Bank and Gaza, captured in a 1967 war, for a state with Arab East Jerusalem as its capital. Hamas is sworn to destroy Israel.

Israeli aircraft kept up nightly air raids on Gaza, firing missiles at militant training camps and roads.

A total of 11 Palestinians, almost all of them militants, have been killed since the offensive began. Israel has also detained dozens of Hamas officials, applying pressure to the government already under an international aid embargo.

Hamas accuses Israel of trying to topple its elected administration, an outcome that would certainly please Israeli leaders. President Mahmoud Abbas, a moderate from the Fatah faction, has also urged Israel to stop its operations.

UN Secretary-General Kofi Annan called on Israelis and Palestinians on Wednesday to ''step back from the brink,'' warning that their escalating confrontation could soon turn explosive.

One Palestinian source close to negotiations with Egyptian mediators said the militants were ready to release Shalit, 19, if Israel set a timetable for freeing some Palestinian prisoners. Israel has rejected any talks or a prisoner swap.

In Damascus, exiled Hamas leader Khaled Meshaal told a visiting Turkish official the group favoured a deal to end the crisis and was ready to show flexibility, but only if Israel agreed to a prisoner swap, political sources said.

The Jewish state has hinted it could assassinate leaders of Hamas unless Shalit was freed. There has been little information on Shalit since he was captured, but Israel has said it believes he is still alive.

REUTERS SK RAI0949