Israeli troops in sporadic Gaza clashes, kill 5

GAZA, July 7 Israeli aircraft and tanks today killed five Palestinians in sporadic clashes with militants across northern Gaza, following the bloodiest day of fighting with gunmen since 2004.

The governing Hamas movement warned that violence in which 20 Palestinians and one Israeli soldier were killed yesterday had hurt efforts to free a captured corporal and said the Jewish state would ''pay the price for every drop of blood''.

The European Union accused Israel of ''disproportionate use of force''.

But in a possible sign of softening on Israel's part, a cabinet minister raised the prospect that Israel could free some prisoners as a ''goodwill gesture'' if Corporal Gilad Shalit was released and all Palestinian attacks stopped.

The army pushed deep into northern Gaza yesterday, taking over ruined Jewish settlements that Israel abandoned last year, in an offensive launched with the aim of bringing home the captured soldier and halting rocket fire.

The incursion has piled pressure on the Hamas government, already reeling from a Western aid embargo. Any lingering hope peace talks could be revived has been dashed by the violence.

An air strike in northern Gaza killed two militants, witnesses and medics said. The army said it had targeted gunmen.

Witnesses said tank fire killed one man near the northern town of Beit Lahiya, scene of the worst violence yesterday.

Some residents said they wanted to leave the area but were too scared and called on international agencies to get them out.

Israeli Prime Minister Ehud Olmert ordered tanks deep into Gaza after Hamas militants fired rockets into a major Israeli city for the first time. The offensive began last week with the main goal of winning the release of Shalit, captured in a raid on June 25.

''The terrorists have paid a heavy price so far,'' Israeli military chief Lieutenant General Dan Halutz said.

HAMAS FURY Hamas said Israel should think again. ''The government of the Occupation is wrong to think the Zionist massacres it is committing against our people will serve its goals of applying pressure to regain the captured soldier,'' the group said in a statement.

Members of the Hamas armed wing were among those who abducted Shalit. Diplomatic talks led by Egypt have failed to secure his release, but an Israeli minister indicated a possible shift in Israel's refusal to free prisoners in exchange.

Interior Minister Avi Dichter, an influential former internal security chief, said that if Shalit was freed and rocket fire and other attacks stopped then Israel might be ready to ''release prisoners to fulfil a goodwill gesture.'' ''Israel knows how to do it,'' Dichter told a conference. In recent years, Israel has freed prisoners as a gesture to promote peacemaking and in exchanges with Lebanese guerrillas.

Despite taking over what amounts to a buffer zone inside Gaza, Israeli officials say there is no plan for long term re-occupation of territory given up last year after 38 years of military rule.

Hamas accuses Israel of using Shalit's abduction as a pretext to topple its elected administration. Israel has detained more than a third of the cabinet and hinted it could assassinate Hamas leaders if Shalit is killed.

Despite Israel's push into Gaza, militants fired at least five homemade rockets into the Israeli border town of Sderot on Friday, with one strike wounding three people, medics said.

The immediate trigger for expanding the offensive was Tuesday's rocket strike on Ashkelon, 12 km (7 miles) from Gaza, The city is the furthest point reached by one of the makeshift missiles, which spread panic but have caused few casualties.

At least 36 Palestinians, the majority of them militants, have been killed since the Israeli offensive began, according to Palestinian medics and officials.

''The EU condemns the loss of lives caused by disproportionate use of force,'' a statement by the Finnish EU presidency said. Israel tends to resist foreign pressure except from its main ally, the United States.

REUTERS