The U.S. considers Hamas, which has killed hundreds of Israelis in suicide and other attacks, to be a terror group and does not meet with its officials. The Obama administration blames Hamas for the latest eruption of violence and says Israel has the right to defend itself. At the same time, it has warned against a ground invasion, saying it could send casualties spiraling.
An airstrike Tuesday killed a senior Hamas militant identified as Amin Al Dada and wounded two others, Gaza heath official Ashraf al-Kidra said.
By Tuesday, 115 Palestinians, including 54 civilians, were killed since Israel began an air onslaught that has so far included nearly 1,500 strikes. Some 840 people have been wounded, including 225 children, Gaza health officials said.
Three Israeli civilians have also been killed and dozens wounded since the fighting began last week, the numbers possibly kept down by a rocket-defense system that Israel developed with U.S. funding. More than 1,000 rockets have been fired at Israel this week, the military said.
Israeli Prime Minister Benjamin Netanyahu said Tuesday that Israel was exploring a diplomatic solution, but wouldn't balk at a broader military operation.
"I prefer a diplomatic solution," Netanyahu said in a statement after meeting with Germany's Foreign Minister Guido Westerwelle, who is also in the region trying to advance peace efforts. "But if the fire continues, we will be forced to take broader measures and will not hesitate to do so."
Westerwelle said a truce must be urgently pursued, "but of course, there is one precondition for everything else, and this is a stop of the missile attacks against Israel."
The conflict erupted last week, when a resurgence in rocket fire from Gaza set off the Israeli offensive, which included hundreds of airstrikes on militants' underground rocket launchers and weapons' stores.
The onslaught turned deadlier over the weekend, as airstrikes began targeting the homes of suspected Hamas activists, leading to a spike in civilian casualties. Israel sent warnings in some cases, witnesses said, but in other instances missiles hit suddenly, burying residents under the rubble of their homes.
Hamas is deeply rooted in densely populated Gaza, and the movement's activists live in the midst of ordinary Gazans. Israel says militants are using civilians as human shields, both for their own safety and to launch rocket strikes from residential neighborhoods.
Early Tuesday, Israeli aircraft targeted another Hamas symbol of power, battering the headquarters of the bank senior Hamas officials set up to sidestep international sanctions on the militant group's rule. After Hamas violently overran Gaza in June 2007, foreign lenders stopped doing business with the militant-led Gaza government, afraid of running afoul of international terror financing laws.
The inside of the bank, which was set up by leading Hamas members and describes itself as a private enterprise, was destroyed. A building supply business in the basement was damaged.
Owner Suleiman Tawil, 31, grimly surveyed the damage to his store and six company cars. "I'm not involved in politics," he said. "I'm a businessman. But the more the Israelis pressure us, the more we will support Hamas."
Fuad Hijazi and two of his toddler sons were killed Monday evening when missiles struck their one-story shack in northern Gaza, leaving a crater about two to three meters (seven to 10 feet) deep in the densely populated neighborhood. Residents said the father was not a militant.
The conflict showed signs of spilling into the West Bank, as hundreds of Palestinian protesters in the town of Jenin clashed with Israeli forces during a demonstration against Israel's Gaza offensive.
Two Palestinian protesters were killed in anti-Israel demonstrations in the West Bank on Monday, according to Palestinian officials. Separate clashes occurred Tuesday in Ramallah, the seat of the Palestinian government, during the funeral for one of the dead.
Palestinian President Mahmoud Abbas, who lost control of Gaza to Hamas in 2007, now governs from the West Bank. Abbas claims to represent both areas, and there is widespread sympathy among West Bank Palestinians for their brethren in Gaza.
As part of truce efforts, Ban was to meet with Israeli President Shimon Peres in Jerusalem on Tuesday. In Cairo, Ban said he would also travel to the West Bank to meet with Palestinian President Mahmoud Abbas.
Egypt, the traditional mediator between Israel and the Arab world, has been at the center of recent diplomatic efforts involving the U.S., Turkey, Qatar and other nations.
Israel demands an end to rocket fire from Gaza and a halt to weapons smuggling into Gaza through tunnels under the border with Egypt. It also wants international guarantees that Hamas will not rearm or use Egypt's Sinai region, which abuts both Gaza and southern Israel, to attack Israelis.
Hamas wants Israel to halt all attacks on Gaza and lift tight restrictions on trade and movement in and out of the territory that have been in place since Hamas seized Gaza by force in 2007. Israel has rejected such demands in the past.
Hamas leader Khaled Mashaal told reporters in Cairo on Monday that Hamas would only agree to a cease-fire if its demands are met. "We don't accept Israeli conditions because it is the aggressor," he said. "We want a cease-fire along with meeting our demands."
Associated Press writers Hamza Hendawi in Cairo, and Karin Laub and Ibrahim Barzak in Gaza City, Gaza Strip, contributed to this report.
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