Israeli forces shot dead two Palestinians including a young boy in clashes in Gaza today and the government said its assault would end only if gunmen stopped attacking the Jewish state from the strip.
Two Israeli soldiers were slightly wounded in fighting in northern Gaza when gunmen detonated an explosive device near troops, the army said.
The latest ground and air offensive, about a week old, has sought to curb an upsurge of militant rocket fire at Israel.
Palestinian factions last night offered a limited ceasefire by saying they would stop firing rockets if Israel halted military action in Gaza and the occupied West Bank.
The offer did not include suicide bombings and Israel swiftly rejected it.
"If the Palestinian terror factions, Hamas, Islamic Jihad, stop terror activities from the Gaza Strip, Israel would have no reason or incentive to operate in Gaza," said Miri Eisin, a spokeswoman for Prime Minister Ehud Olmert.
Palestinian Prime Minister Ismail Haniyeh of Hamas told reporters it was up to Israel to respond positively. "The issue should not be seen as if there is a Palestinian army with an arsenal of rockets ... The issue is that there is an unarmed Palestinian people who are subject to Israeli aggression," he said.
Palestinian hospital officials said the 10-year-old boy was shot dead east of the town of Beit Lahiya. Israel's army said it was checking the report.
Hamas said the other dead Palestinian was a militant and cameraman from the faction's armed wing who filmed Hamas fighters in action.
Israel has killed nearly 400 Palestinians in Gaza, about half of them civilians, since it began its offensive in June following the abduction of an Israeli soldier in a cross-border raid, hospital officials and residents say. Three soldiers have been killed.