GAZA CITY – Six Palestinians and one Israeli soldier have been killed and 35 others wounded after the Israeli army carried out a massive operation in the northern Gaza Strip.

Infantry units backed by tanks stormed into Bait Hanun town overnight, surrounding and blocking access to the hospital and establishing control over the town, medical officials and witnesses said on Wednesday.

Aljazeera’s Palestinian correspondent said the Israeli military has announced the death of an Israeli soldier during the Bait Hanun operation.

An Israeli army spokesman confirmed that a "major operation" was under way in the sector. Two air raids had been carried out and "30 armed Palestinians were hit", he said.

The spokesman said the operation was "limited," but refused to say when it would end.

The action was aimed at stopping rocket fire, he said, adding that Palestinian fighters had fired 300 rockets from Bait Hanun into Israel since the start of the year.

Haniya’s Reaction

During the past several weeks, top Israeli officials have called for an expansion of the Gaza operation.

Ismail Haniya, the Palestinian prime minister, denounced the warnings late on Tuesday during a weekly cabinet meeting.

"The incursions, the threats, the arrests continue," he said.

"The threats have reached a new level since they talk about a partial reoccupation of the Gaza Strip to try and isolate it from Egypt."

The latest incursion came days after Ehud Olmert, the Israeli prime minister, said that Israel could expand its four-month offensive in the coastal strip, which has already left more than 260 Palestinians and two Israeli soldiers dead.

Olmert was quoted as telling MPs in Jerusalem on Monday that the army was "preparing for an even more extensive operation in the Gaza  Strip".

Israel’s security cabinet was meeting on Wednesday to decide whether to enlarge the operations carried out in Gaza  in late June after Palestinian fighters killed two soldiers and seized another in a cross-border raid.

Saudi Initiative

In another development, Amir Peretz, Israel’s defence minister, has said a Saudi peace initiative can be a "basis for negotiation", indicating a new possibility to resume talks with the Palestinians after years of stalemate.

"We could see the Saudi initiative as the basis for negotiation. This does not mean that we are adopting the Saudi initiative, but it can serve as a basis," Peretz told an academic conference at Tel Aviv University on Tuesday night.

The Saudi plan, first proposed in 2002, calls for a comprehensive peace between Israel and the Arab world, based on a complete Israeli withdrawal from lands it captured in the 1967 Middle East war – the West Bank, Gaza Strip, East Jerusalem and Golan Heights.

Peretz is the most senior Israeli official to publicly consider it.

© 2006 Reuters