- Israeli tanks advance in southern Gaza Strip
- Heavy aerial bombardments in Gaza overnight
- Rice urges Israel to "move forward" on ceasefire proposal
- Israel says accepts "principles" of deal
By Nidal al-Mughrabi
GAZA, Jan 8 (Reuters) - Israeli warplanes bombed targets across the Gaza Strip on Thursday and tanks advanced on Palestinian guerrillas as U.S. backing for a truce proposal raised expectations of an end to the offensive.
Residents in Gaza described the overnight bombardments to the east of the city as among the heaviest of the 13-day-old offensive. In the south of the territory a phalanx of tanks advanced closer to the town of Khan Younis, witnesses said.
Although Israel pressed on with the offensive, it said it accepted the "principles" of a European-Egyptian ceasefire proposal. The United States urged Israel to study the plan.
"We believe a ceasefire is necessary," said U.S. Secretary of State Condoleezza Rice.
Israel's assault resumed after a brief pause on Wednesday to help Gaza's 1.5 million people stock up on much-needed supplies. It was the first break in the nearly two-week offensive in which medics say 658 Palestinians have been killed.
But with both George W. Bush's outgoing administration and President-elect Barack Obama speaking out on the need for peace, officials said Israel would send an envoy to Cairo to discuss how the Egyptian plan might be implemented.
That may take several days. In the meantime, Israeli military commanders appear determined to keep up the pressure on the ground, even if a decision on whether to launch a new phase by targeting militants in Gaza's urban centres was put off.
Rice echoed Israel's concerns that a deal must achieve its goal of stopping the Hamas Islamists who rule Gaza from hitting Israel with rockets. "It has to be a ceasefire that will not allow a return to the status quo," she said. Hamas said it was looking at the Egyptian plan, brokered by France, which addresses Israel's demand that Hamas be prevented from rearming through smuggling tunnels from Egypt and also addresses Hamas's call for an end to Israel's blockade of Gaza.
Twenty people were killed on Wednesday, medics said, including three children in an air strike on a car. It took the total of Palestinian deaths since Dec. 27 to at least 658 -- the bloodiest episode in decades of Israel-Palestinian conflict.
U.N. officials have said a quarter of the Palestinian dead were civilians, while other accounts put that proportion higher.
Ten Israelis have died in the past 13 days, seven of them soldiers, including four killed by "friendly" fire.
TRUCE TALK
Tuesday's killing by Israeli shells of 42 people, including women and children sheltering in a United Nations-run school in Jabalya refugee camp, intensified international pressure on Israel to call a halt. U.N. officials denied an Israeli army account that militants had been firing from the school.
Israel has said it will press on until Hamas can no longer hit its southern towns with rockets.
Israeli leaders, censured by voters over a costly war against Lebanon's Hezbollah guerrillas in 2006, face a parliamentary election in a month and will want to show the public the campaign in Gaza has met that objective.
However, U.S. involvement of the kind that helped end the Lebanon war and which was perceived as absent in the first week of the Gaza fighting may indicate that, whatever the state of combat on the ground, a ceasefire could be on the cards.
A spokesman for Prime Minister Ehud Olmert said: "There is a broad understanding on the general principles of a solution."
A senior Israeli official, speaking on condition of anonymity, cautioned: "Translating those principles into practical action is a challenge that is still ahead of us."
Obama, who has steered clear of involvement ahead of his inauguration on Jan. 20, said he would "engage immediately" on the Middle East situation once he took office.
Some Israeli analysts say Israel faces a deadline to wrap up its campaign by the time Obama is sworn in, or risk a strain in ties with Washington at the outset of the new administration.
As diplomatic efforts continued at the United Nations in New York, British Foreign Secretary David Miliband said: "I have seen the first glimmerings of the possibility of a ceasefire.
"It's far too early to say we can get a breakthrough."
European governments have proposed backing the Egyptian ceasefire proposal with an EU force along the Gaza-Egypt border that would prevent Hamas, which seized control of Gaza in 2007, from rearming through its many tunnels.
Hamas, which has backing from Israel's enemies in Iran and Syria and which won a parliamentary election in 2006, is bitterly at odds with Palestinian President Mahmoud Abbas, who has sought to negotiate a peace deal with Israel.
Among Hamas's priorities is securing a lifting of Israel's embargo. Hamas called off a six-month ceasefire late last month, accusing Israel of breaking an agreement to ease supplies.
The schism between the two Palestinian factions has dimmed prospects for a deal to create a Palestinian state and end 60 years of conflict. Unlike Abbas, Hamas refuses to accept the existence of Israel, though it has offered a long-term truce.
Egypt has said it would aim to relaunch efforts to broker a reconciliation between Abbas and Hamas after a Gaza ceasefire.
(Additional reporting by Luke Baker, Dan Williams, Jeffrey Heller, Adam Entous, Allyn Fisher-Ilan and Ori Lewis in Jerusalem; Writing by Alastair Macdonald)