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Heavy fighting has erupted in and around the Gaza City with Hamas fighters putting up a stiff resistance to advancing Israeli ground forces.
Large explosions and intense gun battles were reported from the Shejaiya neighborhood late on Monday.
Flares lit up the skies as Israeli helicopter gunships and fighter jets flew low over the city.
A spokesman of the Al-Quds Brigades, the military wing of the Islamic Jihad movement, told Al Jazeera that Israeli tanks were trying to move into Gaza City.
He said that the group's fighters had destroyed an Israeli armored personnel carrier in the clashes.
Al Jazeera's Alan Fisher, reporting from the Israel-Gaza border, said Israeli sources were telling local media that a major battle was taking place on the outskirts of Gaza City.
Fierce fighting between Israeli troops and Palestinian fighters was also reported in eastern Jabliya in the northern Gaza Strip.
'Everywhere bombed'
"All of Gaza is dark except for the flares fired by F-16s and Apaches [helicopter gunships]. The F-16s for the first time are flying very low and shooting missiles everywhere," Moussa el-Hadda, a retired doctor in the Gaza Strip, said.
"Nobody can leave their home, we have no shelters and Israel knows this. They just bombed everywhere and most of their bombs are hitting houses," he told Al Jazeera.
Earlier, Ehud Barak, the Israeli defense minister, told members of parliament that Gaza City was partially surrounded.
"We have hit Hamas hard, but we have not yet reached all the goals that we have set for ourselves," he said.
But despite 10 days of constant bombardment of the Gaza Strip by the Israeli military, causing the deaths of more than 540 Palestinians, a senior Hamas official said on Monday that "victory is coming" for Palestinian fighters.
Mahmoud al-Zahar said that the movement's armed wing had "given the most beautiful performances during its confrontation with the army that the world thought invincible".
"We will defeat it, God willing," he said.
Al-Zahar warned that Israel's war on Gaza had opened it up to retribution by Palestinian fighters.
"They have legitimized the murder of their own children by killing the children of Palestine," he said.
"They have legitimized the destruction of their synagogues and their schools by hitting our mosques and our schools."
Rocket attacks
Palestinian fighters have continued to fire rockets into southern Israel despite the Israeli military operation.
Abu Obeida, the spokesman for Hamas's Izz-e-din Al-Qassam Brigades, warned the Israeli military that it had many fighters ready to face it in the Gaza Strip.
"We have prepared thousands of brave fighters who are waiting for you in each corner of the streets and will welcome you with fire and iron," he said.
"As long as the aggression intensifies, your losses will increase and you will sink further into the Gaza quagmire."
PHOTO CAPTION
Israeli artillery fire shells towards the Gaza Strip.
Al-Jazeera
