Jan. 15 (Bloomberg) -- Battles raged in the Gaza Strip even as Israeli officials went to Cairo and Washington to discuss an Egyptian cease-fire proposal to end the operation against Hamas that has claimed more than 1,000 lives.

Hamas officials said yesterday they accepted in principle the Egyptian proposal with some reservations. Amos Gilad, an Israeli Defense Ministry official, will meet with Egyptian mediators today to discuss security arrangements along the Egypt-Gaza border, which Israel said must be sealed against weapons smuggling.

The conflict, entering its 20th day today, was begun by Israel to end Hamas rocket attacks on its southern towns and cities. Attacks have fallen to fewer than 20 a day from about 70 at the beginning of the campaign.

Israeli forces fired on a compound belonging to the United Nations Relief and Works Agency in Gaza City, UN officials said. “The Israelis have shot three phosphorus shells against the compound, where hundreds of civilians are being sheltered,” UNWRA spokesman Christopher Gunness said in a phone interview.

UN Secretary-General Ban Ki-Moon, who arrived in Israel today on a mission to end the fighting, expressed “strong protest and outrage” over the shelling. Ban said Israeli Defense Minister Ehud Barak told him by phone that the bombardment of the UN building was “a grave mistake.”

An Israeli army spokesman said Israeli soldiers returned fire that was directed to them from near the compound. UNRWA decided to suspend operations inside Gaza after the incident, in which three UN employees were hurt, Agence France-Presse reported, citing spokesman Adnan Abu Hasna.

Hamas Reply

“Hamas has presented a detailed vision to Egypt to end the aggression against our people in Gaza,” Hamas official Salah Bardaweel said at a news conference in Cairo yesterday.

Egypt’s truce proposal calls for an “immediate cease-fire with the opening of safe corridors for relief into Gaza” and invites both sides to discuss steps including securing the borders and lifting an economic blockade on Gaza.

Hamas would accept an immediate weeklong cease-fire if it is accompanied by an Israeli withdrawal from the Gaza Strip, followed by negotiations toward a longer truce, Hamas official Mussa Abu Marzuk said in an interview in Damascus yesterday.

Hamas is also demanding that border crossings are opened and is willing to accept European or Turkish monitors at the sites, Abu Marzuk said.

“Israel is seeking international support in order to insure that weapons smuggling stops along the Gaza-Egyptian border, Prime Minister’s Office spokesman Mark Regev said.

A senior Israeli diplomat will meet today in Washington with State Department officials to seek a guarantee from the U.S. that it will do more to stop the smuggling of weapons to Hamas from Iran and elsewhere, Haaretz said.

Intelligence Sought

Foreign Ministry Director General Aharon Abramowitz will ask the U.S. for a written agreement that it will share more intelligence information with Israel, spearhead a maritime effort to stop ships suspected of carrying arms for Hamas, and transfer technology to Egypt to aid in the uncovering of smuggling tunnels, the newspaper reported without saying where it got the information. Israeli officials who confirmed the account would not comment further.

The UN chief said reports that Hamas is near agreement on a cease-fire will strengthen his demands to Israeli leaders to also move toward a truce.

‘‘If it is true, it will be very important for the Israeli government to agree to this and discuss terms and conditions,’’ Ban told reporters in Amman, Jordan last night. ‘‘My demand is that they must stop now.’’

Ban is on the third leg of a seven-nation trip to the Middle East to seek a cease-fire, open crossings into Gaza for humanitarian aid and a more permanent, comprehensive solution to the conflict. He met with Egyptian President Hosni Mubarak in Cairo and Jordan’s King Abdullah.

Israel Talks

Ban will meet with Israeli Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni and Defense Minister Ehud Barak.

‘‘We must make it clear to the world that, beyond the deterrence which Israel has created vis-a-vis Hamas, the operation in Gaza will not end in dialogue or agreements with the Hamas terror organization,’’ Livni said in a conference call with Israeli ambassadors, according to the Foreign Ministry. ‘‘Israel has succeeded in maintaining the illegitimacy of Hamas since its rise to power, and the current operation will not end with an arrangement that will grant it legitimacy.’’

Ban said he was ‘‘reasonably encouraged’’ by Mubarak’s report of progress in his mediation between Hamas and Israel. He called Hamas rocket attacks on Israel ‘‘unacceptable.’’

At least 12 rockets were fired into Israel from Gaza early today, and 14 yesterday, according to police. The number of rocket attacks has been cut from more than 70 a day before the war, the military said. About 500 rockets and 200 mortar shells have been fired since the operation began.

Ground Operations

In Israeli operations overnight, air and naval forces struck about 70 targets, including 14 groups of gunmen, 14 rocket-launching sites, and weapons storage facilities, including a mosque in southern Rafah, the army said. Israel began its operation Dec. 27, saying it aims to end the capability of Hamas to fire rockets at its towns and cities.

Thirteen Israelis have died, nine in combat and four from rocket attacks, according to the army.

The Israeli campaign has killed more than 1,010 Palestinians, more than half of them civilians, and left 4,600 wounded, according to Mu’awia Hassanein, chief of emergency medical services in Gaza. The UN Relief and Works Agency said at least a quarter of the dead are civilians, many of them women and children.

There have been widespread protests against Israel’s Gaza operation in European cities and across the Arab world. Al-Qaeda leader Osama bin Laden called for jihad, or holy war, to protest Israel’s actions. Bin Laden’s comments were carried in an audiotape on an Islamist Web site monitored by Alexandria, Virginia-based IntelCenter.

Humanitarian Crisis

International aid groups have warned of a humanitarian crisis, with shortages of food, water and medicines in the impoverished Gaza Strip, where about 1.5 million people live in an area of 360 square kilometers (144 square miles).

Support for the Gaza operation remains high in Israel, accord to a Dialoge poll published today in Haaretz. According to the survey, 78 percent believe the operation is a success, and 13 percent a failure. The poll was conducted among 561 respondents and has a margin of error of 4.3 percent.

Hamas, considered a terrorist group by the U.S., Israel and the European Union, refuses to recognize Israel or any peace agreements with the Jewish state. The organization seeks the lifting of the blockade Israel imposed on Gaza after the group seized control of the seaside strip in June 2007 and ended a partnership government with Palestinian Authority President Mahmoud Abbas, who leads Fatah.

The benchmark TA-25 Index of stocks has gained 4 percent since fighting started. Government bonds were little changed, while the shekel fell 1.2 percent against the dollar.

To contact the reporters on this story: Calev Ben-David in Jerusalem at Cbendavid@bloomberg.net; Saud Abu Ramadan in Gaza City through the Tel Aviv newsroomt .

Last Updated: January 15, 2009 06:07 EST