Two members of the armed wing of the governing Palestinian movement Hamas -- 
which claimed responsibility for Shalit's abduction -- and a policeman were 
killed earlier in helicopter raids and tank shelling. 
Trucks and infantry took over the remains of Dugit, Elei Sinai and Nissanit 
settlements, razed last year as part of Israel's historic pullout from the 
impoverished territory that had meant to draw the curtain on a 38-year 
occupation. 
In the south, two Palestinians were killed and five others wounded in an 
Israeli air strike after ground forces came under fire from at least eight 
rockets. The army said the raid targeted an "anti-tank cell". 
Ground forces and engineers were operating two kilometres (one mile) into the 
south, on a mission to uncover tunnels and explosives, the army said. 
Dozens of Palestinian families, fearing for their lives faced with the 
ominous sight of approaching Israeli armour, fled their homes at dawn. 
Women clutching babies and a few belongings scurried away on foot toward a 
line of waiting taxis amid the boom of gunfire. 
"We woke up and the tanks were right there. There were fighters in our 
garden. We had to flee to protect the children," said one father, rushing away 
from a Beit Lahiya neighbourhood with his wife and four children. 
Palestinian officials and residents believe Israel is using the soldier's 
capture as an excuse to try to topple the Hamas government sworn in last March. 
Tzahi Hanegbi, chairman of Israel parliament's defence and foreign affairs 
committee was unable to rule out the possibility of a long-term presence should 
Palestinian rocket attacks continue, saying "it could also be years". 
An unprecedented Hamas rocket attack Tuesday on central Ashkelon smashed into 
a school, causing extensive damage and leading Israel's security cabinet to 
order the military to step up its offensive and section off parts of Gaza. 
Prime Minister Ehud Olmert himself warned that the attack on Ashkelon would 
have "far-reaching consequences" to be felt first by Hamas. 
Israel has already bombed the Gaza offices of both the Hamas premier and 
interior minister, arrested a third of the cabinet in the occupied West Bank and 
raided multiple militant targets in its offensive. 
In Washington, US Secretary of State Condoleezza Rice on Wednesday called on 
Israelis and Palestinians to exercise restraint but said it was "high time" for 
Hamas to return 19-year-old Gilad Shalit. 
UN Secretary General Kofi Annan, terming the situation "dangerous" and 
potentially "explosive", also urged both sides "to step back from the brink". 
The European Union cautioned that the army's operations had delayed efforts 
to get much-needed funding to the Palestinians, as 1.4 million people living in 
impoverished Gaza grapple with food shortages as well as fuel and power cuts. 
But repeated international calls for restraint have largely fallen on deaf 
ears in what has become the worst Middle East crisis since Hamas came to power 
in March and Olmert formally took the helm in May. 
Israel has vowed to unleash its full military might on Gaza, while Hamas' 
armed wing has vowed a "new era of violence" against the Jewish state. 
Israel says Shalit is still alive but has flatly ruled out negotiations with 
militants and promised to strike anyone linked to them, in a thinly-veiled 
reference to Syria.