Israel kept up its deadly assault on Gaza Strip on Sunday, as Palestinian president Mahmud Abbas halted all contacts with the Jewish state.

Israel's Prime Minister Ehud Olmert vowed to continue the ground and air operation against Palestinian targets.

"It must be clear that Israel has no intention to stop for one moment the fight against terror organizations," Olmert said at the start of the weekly cabinet meeting.

Abbas suspended all contacts with Israel over the continuing assaults, which has killed many people including children and comes just days before US Secretary of State Condoleezza Rice is to arrive in the region.

Seven more Palestinians, including one civilian, were killed early on Sunday amid a continuing Israeli air and ground operations.

Olmert rejected criticism Israel was using excessive force in the densely-packed territory.

"We must remember that Israel is protecting its citizens in the south of the country and that with all due respect, nothing will prevent us from this duty," he said. "No-one has the moral right to preach to Israel for exercising its right to self-defense."

In the northern town of Jabaliya, where Israeli ground troops operated for a second day in a row, residents cowered indoors for fear of being attacked.

In the occupied West Bank, thousands of people took to the streets throughout the territory protesting the Israeli deadly raids.

A 13-year-old Palestinian boy was shot dead by Israeli troops during a demonstration in which youths protesting the Gaza assault threw stones at soldiers, medics said.

At least 303 people have been killed in Israeli-Palestinian violence, most of them Gaza militants, since the relaunch of the talks, according to an AFP tally.

PHOTO CAPTION 

A wounded Palestinian leaves Gaza for treatment in an Egyptian hospital March 2, 2008.