A Palestinian man carries a wounded boy into Gaza City’s al-Shifa hospital, 06 Jan 2009

Aid groups say the humanitarian situation in Gaza is getting worse as Israeli forces push deeper into urban areas and a flurry of diplomacy has yet to yield a truce.

Gaza health officials say more than 560 Palestinians have been killed and another 2,500 wounded during the operation, now in its 11th day.  A Red Cross spokesman in Gaza says the situation is dire, with hospitals overwhelmed with civilian casualties. 

Witnesses say Israeli forces have moved into the southern city of Khan Younis.  They say fighting has also intensified on the outskirts of Gaza City and around the northern refugee camp of Jabaliya. 

Medical workers and U.N. officials say at least three Palestinians were killed in an Israeli airstrike on a United Nations school.

Israel says it has killed 130 militant fighters since it began a ground offensive Saturday.  Israeli Defense Minister Ehud Barak said the campaign in Gaza will continue until Israel achieves "peace and tranquility" for residents of southern Israel, who have been targets of Hamas rocket attacks.

Former British Prime Minister Tony Blair, envoy of the Quartet of Middle East peace brokers - consisting of the United States, the European Union, the U.N. and Russia - said Tuesday an immediate cease-fire is possible if the tunnels used to ferry arms from Egypt into Gaza are cut off. 

Arab leaders have drafted a resolution calling for Israel to stop its offensive, and could present it at the United Nations as early as Tuesday.

Hamas has continued to fire rockets into southern Israel throughout the campaign, killing four Israelis.

French President Nicolas Sarkozy held talks with Syrian President Bashar al-Assad in Damascus Tuesday, part of his diplomatic tour of the region.  The French president said his Syrian counterpart can play an important role in pressuring Hamas to end its rocket attacks on southern Israel.

Mr. Assad denounced the Israeli offensive as "barbaric aggression."

A spokesman for the Chinese foreign ministry, Qin Gang, says Beijing will send $1 million worth of assistance to the Palestinian Authority.  

At least four Israeli soldiers have been killed by so-called "friendly fire" since the offensive began late Saturday. Three of them were killed and 24 others wounded when they were accidentally hit by an Israeli tank shell.  The fourth solider - a paratroops officer - was killed in a separate incident in northern Gaza.