GAZA, March 1: Israel killed 46 Palestinians on Saturday in its deadliest and deepest incursion into the Gaza Strip since pulling out in 2005, stoking fears of a broader conflict that could derail renewed US-backed peace talks.

Two Israeli soldiers were also killed and seven wounded, the army said -- its first casualties in four days of fighting.

At least 81 Palestinians have been killed since Wednesday in intense Israeli air strikes and ground raids in the tiny Hamas-controlled territory, home to 1.5 million people, bordering Israel, Egypt and the Mediterranean.

Israel claimed it was responding to cross-border rockets, which killed an Israeli man in the border town of Sderot on Wednesday and wounded others in the southern city of Ashkelon.

Almost fifty rockets and mortars landed in southern Israel on Saturday, including several Soviet-designed Grad missiles, which are more powerful and accurate than improvised Qassams produced locally, the army said.

Palestinian officials said the one-day death toll in Gaza was the highest since 2002.

Of the 46 Palestinians killed, 26 were civilians and the rest were militants, according to hospital staff and the Hamas movement, which seized Gaza last June after routing the more secular Fatah forces of Palestinian President Mahmoud Abbas.

“Uncle, I do not want to die, I want my dad,” a toddler screamed as doctors tried to treat burn wounds across her body in Gaza’s main Shifa hospital. The girl was injured in a house which the army said was used to store and make weapons.

One of the dead civilians was a mother who was preparing breakfast for her children when she was hit by gunfire, relatives and medical workers said.

One missile slammed into a crowd of Palestinians, killing four civilians, medical staff and Hamas said. The army said it had fired on militants.

Palestinian officials said Israeli forces advanced towards the towns of Beit Hanoun and Jabalya, the largest and furthest incursion into Gaza since 2005, when Israel pulled out its settlers and troops from the territory after 38 years.

The US on Friday urged Israel to “consider the consequences” of any action ahead of next week’s scheduled visit by Secretary of State Condoleezza Rice.

Russia and the United Nations appealed for calm.

More bloodshed could derail Washington’s hopes of a deal on Palestinian statehood before President George Bush leaves office in January.

Speaking in Damascus, exiled Hamas leader Khaled Meshaal told Israel what he believed it would face if it mounted an invasion: “I say to the Zionist leaders, if they decided to raid Gaza, they will not be fought by dozens of fighters but they will be fought by 1.5 million people.”

Mr Abbas, who remains hostile to Hamas, called the Israeli actions “unbelievable” and said what is happening “is more than a holocaust”, a reference to a senior Israeli defence official who warned of a “shoah” (the Jewish word for holocaust) in Gaza.

Witnesses said fighting erupted after Israel soldiers, backed by helicopter gunships, entered northern Gaza on Friday night and were confronted by Palestinian militants.

A Palestinian said he saw at least one Israeli soldier, whose body had been sliced in half, being pulled from a tank. Three Israelis were injured by rockets that reached deep into Ashkelon.—Reuters