Israel pounded Hamas targets in the Gaza Strip from the air on Sunday and prepared for a possible invasion after killing at least 298 Palestinians in two days of attacks.
Israel said the campaign that began on Saturday was a response to almost daily rocket and mortar fire that intensified after Hamas, the Islamist group in charge of the enclave that Israel quit in 2005, ended a six-month ceasefire a week ago.
Israel stepped up air strikes after dark on Sunday, destroying a laboratory building at the Islamic University in Gaza, a significant cultural symbol, Hamas said. Israel has accused Hamas of using the facilities to develop explosives.
During the first two days of the assault, militants fired about 150 rockets and mortars at Israel, the army said, less than had been expected. Two rockets struck near the port of Ashdod, 30 km (18 miles) from Gaza, causing no casualties.
The attacks enraged Arabs across the Middle East, where protesters burned Israeli and U.S. flags to press for a stronger response from their leaders to Israel's attack on Gaza.
Israeli tanks deployed on the edge of the Gaza Strip, poised to enter the densely populated enclave of 1.5 million Palestinians. Prime Minister Ehud Olmert's cabinet approved a call-up of 6,500 reservists, a government official said.
Israeli Defense Minister Ehud Barak told top commanders at a briefing on Sunday that the Israeli offensive was open-ended. Military spokesman Avi Benayahu said it could "take many days."
Mark Regev, a spokesman for Olmert, said the campaign would continue until the population in southern Israel "will no longer live in terror and in fear of constant rocket barrages."
Foreign Minister Tzipi Livni, who hopes to become prime minister after a February 10 election, appeared to rule out a large-scale invasion to recapture the territory.
"Our goal is not to reoccupy Gaza Strip," she said on NBC's "Meet the Press" program. Asked on Fox News if Israel was out to topple Gaza's Hamas rulers, Livni replied: "Not now."
The U.N. Security Council called on all sides to cease fire. But an Israeli official said Israel was feeling little international pressure to halt its operations.
Hamas spokesman Fawzi Barhoum urged Palestinian groups to use "all available means, including martyrdom operations" -- a reference to suicide bombings in Israel.
Keeping pressure on Hamas after bombing runs that turned Saturday into one of the bloodiest days for Palestinians in 60 years of conflict, Israeli aircraft flattened the group's main security compound in Gaza, killing at least four security men.
Israel expanded its air campaign to the southern Gaza Strip, bombing some 40 smuggling tunnels running under the border with Egypt, a network that is a lifeline to the outside world.
Dozens of Gazans crossed into Egypt through holes opened in the border wall by bulldozers and explosives. An Egyptian border guard and a Palestinian youth died in a clash as Egyptian police tried to stop the influx, medics and Egyptian security said.
Egypt later warned Gaza residents to steer clear of the border area as Israel planned to bomb more tunnels there, a Palestinian security source said. Israel says militants use border tunnels to smuggle weapons into Gaza.
"SHOCK AND AWE"
Palestinian health officials said the deaths raised to 298 the number of Palestinians killed since Saturday, when Israel launched what one Israeli newspaper columnist described as "shock and awe" air strikes against Hamas facilities.
Hamas said 180 of its members were killed and the rest included civilians, among them 16 women and some children.
The international Red Cross said that hospitals in the Gaza Strip were overwhelmed and unable to cope with the casualties.
One Israeli was killed on Saturday by a rocket fired from Gaza. Gazan rockets have caused few Israeli casualties but have damaged property and sparked panic in many border towns.
Benayahu, the army spokesman, said Hamas had not yet responded as strongly as expected, possibly because it was "trying to recover from the blows," but that "it is too soon to eulogize" it.
Livni said Israel was trying to "target only terrorists and Hamas headquarters." "But, unfortunately, in a war ... sometimes also civilians pay the price."
Violence spread to the occupied West Bank, where Israeli soldiers opened fire at stone-throwing Palestinian protesters. Palestinian medical officials said two Palestinians were killed.
Palestinian forces loyal to President Mahmoud Abbas of Fatah shot and wounded three people in a protest in support of Hamas. Arab citizens of Israel also held protests.
In Damascus, a senior official said Syria has suspended indirect peace talks with Israel in response to the attacks.
Sayyed Hassan Nasrallah, leader of Lebanese Hezbollah guerrillas who fought a 2006 war with Israel, said he asked fighters to be on standby for a possible Israeli attack.
Parents in Gaza kept their children home from school as the roar of Israeli aircraft and thunder of explosions echoed. Schools in Israel's south, due to reopen on Tuesday after the Jewish holiday of Hanukkah, were ordered to stay shut.
Abbas, speaking in Cairo, accused Hamas, which seized the Gaza Strip from Fatah in 2007, of triggering Israel's raids by not extending the ceasefire that Egypt brokered in June.
U.S. President George W. Bush's administration, in its final weeks in office, put the onus on Hamas to prevent more violence.
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