By Nidal al-Mughrabi
GAZA (Reuters) - Israeli warplanes attacked government buildings in the Gaza Strip early on New Year's Day after Israel and its Islamist Hamas foe both spurned cease-fire calls in a conflict that has killed about 400 Palestinians.
Israeli tanks and troops were massed near the border of the densely-populated coastal enclave with the Haaretz newspaper on Thursday reporting the Israeli army had recommended a major but short-term ground offensive.
Hamas rockets fired from Gaza hit an Israeli city on Wednesday, scaring residents but hardening Israel's resolve to stamp out a threat that has killed three Israeli civilians and a soldier since renewed hostilities broke out on December 27.
Foreign pressure grew on both sides to end hostilities but Israel brushed aside as "unrealistic" a French proposal for a 48-hour truce that would allow in more humanitarian aid for Gaza's 1.5 million residents.
In New York, the U.N. Security Council discussed the violence, with Arab countries pushing for a demand an immediate cease-fire, but the emergency session adjourned without a vote.
Western delegates described the Arab-drafted resolution as unbalanced in its present form and said negotiations would continue to reach an agreed text.
Early Thursday Israeli warplanes struck again having carried out 10 raids Wednesday. Hamas security officials said buildings housing the education and transportation ministries had been virtually destroyed. The Palestinian parliament building was also hit, they said.
Hamas leader Ismail Haniyeh said Israeli attacks must stop before any truce proposals could be considered. Israel must also lift its economic blockade of Gaza and open border crossings.
"After that it will be possible to talk on all issues without any exception," Haniyeh said in a televised speech.
U.S. President George W. Bush spoke by phone to Israeli Prime Minister Ehud Olmert, the White House said. Bush put the onus on Hamas to stop firing rockets as a first step to a truce.
Olmert told his security cabinet that if a diplomatic solution could be found that ensured better security for southern Israel, the government would consider it.
"But at the moment, it's not there," an aide quoted Olmert as saying. "We didn't start this operation just to end it with rocket fire continuing as it did before it began."
Palestinian President Mahmoud Abbas, who is based in the West Bank, called for the fighting to stop "immediately and without any conditions" and said Israel was fully responsible.
Diplomats said the deadliest conflict in the Gaza Strip in four decades could get even bloodier after days of air strikes that have killed at least 396 Palestinians, about a quarter of whom, U.N. figures showed, were civilians.
Along the fortified border fence, Israeli tank crews prepared for battle while Islamist militants, hiding as little as a few hundred yards (metres) away, laid land mines and other booby traps should a ground war break out.
Rain storms had made an imminent invasion less likely but the weather was forecast to improve over the next few days.
Ministers, however, approved the mobilisation of 2,500 army reservists, expanding on an earlier call-up of 6,500 soldiers for the force on the Gaza border.
"We said ahead of time that this would not be short or easy but we are determined to deepen and broaden the operation until the objectives which we committed to in this operation are achieved," DefenceMinister Ehud Barak told reporters.
Inside Gaza, residents stepped outside their homes to stock up on supplies Wednesday, taking advantage of a reduced number of Israeli air strikes.
"What we need most is sugar, rice and flour and there is nothing of that in the stores," said Abu Hani, trying to buy food for his family of five.
Israel said it was doing its part to let humanitarian supplies into Gaza despite continued rocket fire. Ninety-three truckloads of food, medicine and blood for hospitals entered on Wednesday, an Israeli official said. Gaza officials said 97 more trucks would be let in Thursday.
NEW YEAR PARTIES CANCELLED
At least eight Hamas rockets hit the Israeli city of Beersheba, 40 km (24 miles) from Gaza, Wednesday. One of the long-range Grad rockets struck a school but it was empty after authorities cancelled classes.
Mayor Rubie Danilovitch told Beersheba residents to cancel New Year's parties and stay at home.
Other long-range rockets hit the southern coastal city of Ashkelon and dozens of short-range rockets pelted border towns.
Arab foreign ministers met in Cairo to seek a common position in response to the Israeli attacks but the Arab world is deeply divided in its attitude towards Hamas, which took over the Gaza Strip last year after fighting a brief war with the secular Fatah faction loyal to Western-backed Abbas.
Food supplies in Gaza were running low and power cuts were affecting much of the territory. Hospitals were struggling to cope with the high number of casualties from the offensive.
At least 1,712 Palestinians have been wounded.
Olmert's centrist government launched the operation six weeks before a February 10 election that opinion polls predict the opposition right-wing Likud party will win.
The current violence broke out after a six-month cease-fire brokered by Egypt expired on December 19 and Hamas intensified the rocket attacks from the blockaded Gaza Strip.
France said it would host Israeli Foreign Minister Tzipi Livni Thursday and an Israeli official said French President Nicolas Sarkozy planned to visit Jerusalem next Monday.
(Additional reporting by Adam Entous, Ari Rabinovitch, Jeffrey Heller and Ori Lewis in Jerusalem, Wafa Amr and Ali Sawafta in Ramallah, Patrick Worsnip at the United Nations, James Mackenzie in Paris and Alaa Shahine in Cairo; Writing by Angus MacSwan; Editing by Matthew Jones)
(For more stories on Gaza, please click on [nLO226261])