Heavy fighting was underway in the north of Gaza city last night as Israeli Defence Minister Ehud Barak pledged to continue the war against Hamas — entering its tenth day — until “peace and tranquillity” returned to the south of his country.

Residents in the territory's main city reported heavy ground and air bombardment sending plumes of smoke into the air as flares and fires periodically lit up the night sky above the northern district of Zeitoun, where some of the most intense engagements were believed to be taking place.

In the first — albeit oblique — acknowledgement that heavy exchanges of fire had taken place during the day on Gaza streets between troops and Hamas militants, the military said aerial and artillery forces “had assisted ground forces by attacking armed gunmen approaching them, striking launching areas from which Hamas fired rockets at the forces”.

It added it had “hit dozens of terror operatives”.

Meanwhile, the Islamic faction — which fired two dozen rockets at Israel — promised to wait for Israeli soldiers “in every street and every alleyway”.

While citing Palestinian Ministry of Health figures saying the total death toll so far of the offensive had risen to 534, and that at least 2,470 had now been injured, a UN report last night said that “the danger to medical staff and the difficulty of extracting the |injured from collapsed buildings” made precise estimates difficult.

Saying the population of Gaza was “bearing the brunt” of the violence, the Palestinian death toll had now risen to 94 since the beginning of the ground offensive on Saturday night.

It said that “many” of the recent deaths had been of women and children, “with entire families” among the dead.

Reuters reported last night that 13 members of the Samoudi family had been killed in the shelling of a house in eastern Gaza.

By 3pm, 25 Palestinians had been killed since the early morning alone, at least 10 of them thought to be children.

According to the UN, Israeli ground forces, backed by aircraft tanks, and artillery, were currently deployed around Gazan population centres, including Gaza city, Beit Hanoun Beit Lahiya and the Jabalia refugee camp, as well as eastern Gaza, the northern middle section of the strip and south eastern Rafah in the south.

With Gaza now divided in two, internal movement in the strip was now “extremely dangerous”.

The report from the UN Office of Co-ordination of Humanitarian Affairs added: “More than a million Gazans still have no electricity or water, and thousands of people have fled their homes for safe shelter.”

Israeli forces — whom a military spokeswoman said had been training for two years in a mock Arab city to prepare for possible urban warfare in Gaza — continued to move into populated areas last night, despite the frantic fresh flurry of diplomatic activity in the region.

As French President Nicolas Sarkozy held talks with the Palestinian President Mahmoud Abbas in Ramallah last night, calling for a ceasefire “as soon as possible”, the potential deployment of a “robust” international force along Gaza borders was emerging as a key component of talks between Israel and the international community.

Some European countries — notably Britain — have been arguing that international efforts should be mounted to reinforce Egyptian security at the southern Gaza border to halt smuggling of weapons by Hamas if and when the fighting ceases.

Such a plan envisages that the international force would effectively be a quid pro quo for opening crossings — including for commercial goods — as a means of reviving Gaza's stricken economy since Israel imposed its embargo after Hamas' enforced takeover of control last June, after its short-lived coalition with Fatah collapsed.

The international Middle East envoy Tony Blair, who has held a series of meetings with Israeli leaders and Mr Abbas over the last two days, is working full time trying to devise a detailed formula under which such a plan could help to bring the current conflict in Gaza to an end.

Any such deal is, however, fraught with difficulties and Israel, besides resisting a direct linkage between the crossings issue and the anti-smuggling measures which it regards as paramount, is arguing that any deal should be made with the international community — the Ramallah-based Palestinian Authority — and not with Hamas.

The Foreign Secretary David Miliband flew to New York last night where Arab foreign ministers are preparing for a UN security council session today, focusing on a new draft of a UN resolutions calling for an end to the “Israeli aggression” and a permanent ceasefire.

The Palestinian Foreign Minister, Riyad al-Malki, told reporters in New York that Arab states hoped that the draft would be adopted by the 15-member council today.

The latest draft also calls for international border monitors and an international force to protect civilians in Gaza.

However, UN diplomats said that after Washington blocked a Libyan draft resolution on Saturday night which was deemed to be “unbalanced”, it was hard to see a resolution being adopted today.

The Ramallah-based Palestinian President Mahmoud Abbas will be in New York for the session, which could be public and therefore set the scene for a showdown between the US and its Arab critics.