Israeli leaders will debate on Wednesday whether to order their armed forces to storm into the Gaza Strip’s urban centres, the planned culmination of a nearly two-week-old offensive, political sources said.

Escalating from a week-long air assault, Israeli troops and tanks invaded the Hamas-ruled territory on Saturday, clashing with Palestinian guerrillas but not advancing beyond the outskirts of the city of Gaza or other densely populated areas.

Israel called the initial ground sweep the “second stage” of the operation, without saying what could follow. The opacity helped spur a frenzy of international mediation to secure a truce under which Hamas would stop cross-border rocket fire

Israel and Hamas studied an Egyptian proposal for a ceasefire in the Gaza Strip on Wednesday that won immediate backing from the United States and Europe, hours after Israeli shells killed 42 Palestinians at a U.N. school.

However, Israeli officials also said ministers would discuss a major escalation of their 12-day-old offensive that would push troops deep inside Gaza’s cities and refugee camps in their bid to end rocket salvoes into Israel by Islamist militants.
With Washington in a transition period ahead of the Jan. 20 inauguration of President-elect Barack Obama, France and its European partners, with backing from U.S. allies in the Arab world, have been pushing hard for Israel to cease fire.

U.S. Secretary of State Condoleezza Rice endorsed the Mubarak proposal and said a “sustainable” ceasefire should involve both closing off Hamas’s ability to rearm through tunnels from Egypt and easing the lives of the 1.5 million people of Gaza by reopening trade routes.