Sat Jan 3, 2009 12:43pm EST

By Nidal al-Mughrabi

GAZA (Reuters) - Israeli forces hit the Gaza Strip from land, sea and air on Saturday, stepping up their offensive against Hamas in the Palestinian enclave as tanks and troops waited on the border for a possible ground offensive.

In the bloodiest incident of the day, an air strike on a mosque killed 11 Palestinian civilians, including children, and wounded dozens as they prayed, Hamas officials said.

Hamas kept up its rocket attacks on southern Israel in defiance of international calls for it to halt such actions.

As the Israeli offensive entered its second week, prospects of a ceasefire any time soon looked dim.

"I hope the results of this operation will bring about quiet in the long term. The moment they fire, we will respond with great force," Foreign Minister Tzipi Livni said on Israeli TV.

"It could be that several operations will be needed in this regard."

Witnesses said the air strike on the mosque in the town of Beit Lahiya took place as people prayed inside. At least 11 civilians were killed and 50 wounded, Hamas and medical officials said.

Rescuers pulled people from the debris and the bodies of victims lay in pools of blood, the witnesses said.

An Israeli military spokesman had no immediate comment. Israel has targeted mosques previously saying that Hamas had used them as command posts and fire bases.

Saturday's incident brought the Palestinian death toll to at least 446, with about 2,050 wounded, in the worst sustained bloodshed in decades of the conflict between Israel and the Palestinians.

Four Israelis have also been killed in cross-border rocket attacks by Hamas and other militant groups.

Just before nightfall, Israel launched artillery fire on Gaza for the first time in the offensive, creating a fog of dust and smoke that obscured visibility.

Deputy Israeli Defense Minister Matan Vilnai played down speculation the artillery fire heralded a ground offensive.

"I don't think this is the next stage. This is part of a military campaign being waged and now artillery cannons have joined in," he told Israel Radio.

Israeli tanks and troops were massed on Gaza's borders ready for a ground invasion that remains an option unless international efforts to arrange a ceasefire gain momentum.

Israeli air strikes targeted Gaza from early morning on Saturday and naval vessels also shelled the area from the Mediterranean, witnesses said.

One strike killed Abu Zakaria al-Jamal, a senior commander of Hamas's armed wing, Hamas said. He was the second Hamas leader killed in three days.

Israeli war planes also hit a private Palestinian college called the American School, killing a guard.

Israel launched the campaign, called Operation Cast Lead, on December 27 saying it wanted to stop Hamas rocket attacks on southern Israel.

Those attacks have continued however and 17 Hamas rockets smacked into Israel on Saturday, the Israeli military said. Two people were hurt by shrapnel when a rocket hit a building in the port city of Ashdod.

The Hamas cabinet said on Saturday the campaign would not force it to bow to Israel's will.

"Whoever thought a change in the political area could come through the bombs of planes and the tanks and without dialogue is an illusionist," it said in a statement after meeting in Gaza in an undisclosed location.

Israel denies that it aims to topple Hamas but says the rocket attacks must stop before it halts operations.

NOWHERE TO RUN

The plight of the 1.5 million Palestinians crammed into Gaza was growing more desperate even before the mosque was hit. People sheltered in their homes and humanitarian agencies warned that food, water and medical supplies were running short.

"Nobody feels safe," an International Committee of the Red Cross worker said in a report on the body's website.

"The problem is that we have nowhere to run for shelter."

Bombs have damaged the water system and utilities were barely functioning. The electric power plant has shut down and the sanitation system cannot treat the sewage.

In the winter cold, fuel for heating and cooking gas was no longer available, aid agencies said.

"We do not sleep at all at night. We stayed awake the whole night because of the planes," said Umm Kamel, a mother of 11 baking bread in her home in Gaza.

Israel has denied a humanitarian crisis is unfolding and says it has allowed food and medicine convoys into Gaza daily.

U.S. President George W. Bush said Hamas -- which the United States, Israel's main backer, deems a terrorist organization -- must take the first step toward a ceasefire.

"Another one-way ceasefire that leads to rocket attacks on Israel is not acceptable," Bush said in remarks prepared for his weekly Saturday radio address.

Israel occupied Gaza in the 1967 Middle East War and after Palestinian uprisings formally ended its military rule in 2005, although it still controls the borders.

International peace efforts aimed at creating an independent Palestinian state foundered after Hamas won elections in 2006 and drove Fatah forces loyal to Palestinian President Mahmoud Abbas from Gaza a year later.

Hamas called off a six-month truce with Israel last month and stepped up the rocket attacks, complaining at Israeli raids into Gaza and a continuing blockade of the enclave.

http://www.reuters.com/article/newsOne/idUSLS69391620090103