Israel rejects cease-fire offer

~ Israel demanded that Hamas first free an abducted soldier and halt rocket attacks.

GAZA CITY, Gaza Strip -- The head of the Hamas-led Palestinian government called Saturday for a truce to halt the Israeli offensive in Gaza, but Israel demanded that Hamas first free a captured Israeli soldier and halt rocket attacks on its southern towns.

Israeli troops scaled back their operations to two spots in Gaza as fighting claimed the lives of six Palestinians, raising the death toll to at least 44 since the incursion began last week.

Israeli aircraft targeted militants in western Gaza City early Sunday, local time, firing a missile at them and wounding four, one seriously, Palestinian hospital officials said. The Israeli military had no immediate comment.

Aircraft also fired a missile at a bridge in northern Gaza, collapsing it and knocking out a power transformer serving the town of Beit Hanoun, witnesses said. The military said it hit the bridge to stop militants using it to move rockets.

Israeli troops entered the Gaza Strip on June 28, three days after Hamas militants captured an Israeli soldier during a cross-border raid. Since then Israel has been battering the coastal strip with heavy artillery barrages and airstrikes.

Palestinian Prime Minister Ismail Haniyeh urged Israel on Saturday to halt the offensive, release Palestinian prisoners and resume indirect talks about the captured soldier through international mediators. But he did not offer to free Cpl. Gilad Shalit, 19.

"We want to activate this initiative to bring the region out of this whirlpool of blood," Haniyeh said while touring Beit Lahiya, the hardest-hit Gaza town.

Hamas often sends out conflicting signals, however, in part because of divisions between its more militant leaders in Syria and more pragmatic politicians in Gaza. Israel has accused the Hamas political chief, Syrian-based Khaled Mashaal, of ordering Shalit's capture.

Aides to Israel Prime Minister Ehud Olmert said he would not accept a truce until Shalit was freed. Foreign Ministry spokesman Mark Regev said rocket attacks must also stop first.

The militants have demanded the release of Palestinian prisoners held by Israel in exchange for Shalit.

Israeli aircraft, intensifying their operations around Gaza City, carried out two strikes Saturday evening in an outlying neighborhood. The military was investigating whether one of the strikes, which it said was aimed at militants, hit a house, killing a mother and two of her children, including a 6-year-old girl. Four other family members were wounded.

The force of the blast tore open one of the house's outer walls. The courtyard outside was stained with blood. The lifeless body of 6-year-old Rawan Hajaj was carried inside a Gaza City hospital, wrapped in a red blanket. Her mother, Amona, and 20-year-old brother Mohammed were also killed, and six other people were wounded.

The United Nations blamed Israel for a burgeoning crisis, including deaths, injuries and harm to children, created by its offensive in Gaza.

"Unless urgent action is taken," a three-page statement released Saturday said, "we are facing a humanitarian crisis that will have far-reaching consequences."

Israel pulled its tanks out of Beit Lahiya, leaving a wide swath of destruction after trying to carve out a buffer zone against rockets there. Tanks driving through narrow streets sheared off outer walls of buildings, tore down electricity poles and chopped up asphalt. Bulldozers churned fields and knocked down trees and greenhouses.

Israeli troops also left nearby Beit Hanoun and three Jewish settlements in northern Gaza that Israel abandoned nearly a year ago when it unilaterally withdrew from the territory.

Palestinian witnesses said Israeli tanks moved into an abandoned Israeli settlement in northern Gaza early Sunday, a day after pulling back.

An Israeli military spokesman denied the claim.

On Sunday morning, Israeli soldiers were in position only at the defunct airport just across from the Israeli border in southern Gaza and in the Gaza City-Karni area, the military said.

Capt. Jacob Dallal, an army spokesman, said troops repositioned Saturday because they had accomplished their objectives in northern Gaza -- drawing militants into direct combat.

"We much prefer to engage these people with the army as opposed to having these people fire rockets at schools in Ashkelon and Sderot," he said, referring to two southern Israeli cities that have come under militant rocket fire.