Israel, Hamas trade fire, tough proposals

GAZA CITY, Gaza Strip -- Israel and Gaza's Hamas rulers traded fire and tough cease-fire proposals Monday, and threatened to escalate their border conflict if diplomacy fails. No deal appeared near.

An Israeli airstrike targeting a Gaza media center killed a senior militant and engulfed the building in flames. The Israeli military said the Islamic Jihad were using space there as a command center.

Gaza fighters fired 95 rockets at southern Israeli cities, nearly one-third of them intercepted by an Israeli missile shield.

A total of 38 Palestinians were reported killed Monday. Two more died in airstrikes past midnight, bringing the death toll since the start of Israel's offensive to 111, including 56 civilians. Some 840 people have been wounded, including 225 children, Gaza heath officials said. Three Israeli civilians have been killed and dozens have been wounded.

Over the weekend, civilian casualties in Gaza rose sharply after Israel began targeting the homes of what it said were suspected militants. Two such strikes late Monday killed five people, medics said.

The Israeli military says Gaza militants fire rockets from residential areas. Late Monday it released footage that it said showed a militant weapons depot hidden in a Gaza neighborhood.

Egypt, the traditional mediator between Israel and the Arab world, was at the center of a flurry of diplomatic activity Monday. Egyptian intelligence officials met separately in Cairo with an Israeli envoy and with Khaled Mashaal, the top Hamas leader in exile.

Hamas wants Israel to halt attacks on Gaza and lift 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 demands an end to rocket fire from Gaza and a halt to weapons smuggling into Gaza through tunnels under the border with Egypt.

Some close to the negotiations suggested Egypt is first seeking a halt to fighting before other conditions are discussed. They spoke on condition of anonymity.

As part of global efforts to end the Gaza fighting, UN chief Ban Ki-moon arrived in Cairo on Monday and was to meet with Israeli President Shimon Peres on Tuesday.Israeli police spokesman Micky Rosenfeld said 29 rockets were intercepted by the Iron Dome anti-missile battery. Rockets landed in open areas of Beersheva, Ashdod, Ashkelon, and caused damage in a number of areas.

Schools in southern Israel have been closed since the start of the offensive on Wednesday, and large police units deployed in the area to respond to any potential damage and injuries from rockets.