Deadly Gaza conflict reignites as Egypt backs new truce

The month-long conflict flared once again after mediators tried but failed to extend a ceasefire that expired at 0500 GMT after Palestinian militants breached the quiet with pre-dawn rocket attacks.

Egypt, which is mediating between Israelis and Palestinians, insisted negotiations were making progress but Israel recalled its delegation and warned it would not negotiate under fire.

Prime Minister Benjamin Netanyahu ordered the military to retaliate "forcefully" and blamed the Islamist movement Hamas for breaching the ceasefire.

The army said 35 air strikes had been carried out across Gaza on Friday.

Palestinian militants fired 35 rockets into Israel, injuring one civilian and a soldier, the army said.

The violence ended the 72-hour lull in fighting between Israel and Hamas that has killed at least 1,895 Palestinians and 67 people on the Israeli side, almost all soldiers, since July 8.

Friday's fatalities were a 10-year-old boy and a 22-year-old man, with at least 20 other Palestinians wounded in Israeli air strikes, said Ashraf al-Qudra, Gaza's emergency services spokesman.

Some Palestinian families who had returned home trickled back to shelter in UN-run schools after militants fired rockets at Israel and Israel retaliated from the skies.

The United Nations says at least 1,354 of the Palestinians killed in the fighting since July 8 were civilians, including 447 children.

In Al-Tuffah district of Gaza City, hundreds of refugees were seen living in classrooms, laundry hanging off balconies and a scrum of people queueing for UN food handouts.

"Of course we're all scared, I'm scared, my children are scared, my wife is scared," Abdullah Abdullah, 33, told AFP at the school.

In southern Israel, the army banned gatherings larger than 500 people within 40 kilometres (25 miles) of Gaza and said kindergarten and summer camps could only operate if there was a bomb shelter nearby.

"This is very frustrating, we thought it would be over," said Dov Hartuv, who has lived for decades in Nahal Oz kibbutz just east of the border with Gaza.

"This might just be for 12 or 24 hours before they return to the negotiating table. Meanwhile it ruined all our plans and frustrated all of us, especially the families with young children," he told AFP.

In Gaza, the interior ministry said Israeli warplanes struck targets in Jabaliya in the north, Gaza City and in the centre of the Palestinian enclave.

Israel said it was targeting "terror sites".

It first launched an air campaign on July 8, followed nine days later by a ground offensive designed to destroy Hamas's arsenal of rockets and its network of attack tunnels stretching into Israel.

"We will continue to strike Hamas, its infrastructure, its operatives and restore security for the state of Israel," said army spokesman Lieutenant Colonel Peter Lerner.

Egypt called for an immediate return of the ceasefire and said progress had been made in the negotiations.

The head of a Palestinian delegation in Cairo said they were committed to achieving a truce.

"We told the Egyptians (mediators) we are sitting here to achieve a final agreement that restores the rights" of Palestinians, Azzam al-Ahmed told reporters.

Hamas and the Islamic Jihad group had rejected another 72-hour truce, accusing Israel of stalling.

"There had been an agreement on the vast majority of matters that are important to the Palestinian people, but some limited points remained undecided, a matter that should have led to an acceptance to renew the ceasefire," the Egyptian foreign ministry said.

Hamas and Palestine Liberation Organisation officials laid out a number of demands, including the lifting of Israel's eight-year blockade and the building of a sea port.

They also want Israel to free some 125 key prisoners.

Mohamed Ghanem, a cleric close to Hamas, told prayers at a mosque in Gaza's Zeitun area: "Palestinian unity is the real strength and there must be unity in supporting the stance in the current negotiations with the Israeli enemy in Cairo."

Despite withdrawing all its troops from Gaza by the time the truce began on Tuesday, Israel has retained forces along the border, ready to respond to any resumption of fighting.