Hamas militant dies in Gaza raid

Palestinians at the scene of an Israeli air strike in Gaza

Israeli troops have killed a Hamas gunman during a raid in the north of the Gaza Strip. An Israeli soldier was wounded in the exchange of fire.

Earlier on Friday, a number of people were wounded in Gaza in a missile strike on a position used by Hamas.

Also on Friday, Israeli PM Ehud Olmert warned that a major Israeli military campaign in the Gaza Strip appeared more and more likely.

He said "the pendulum is much closer to a decision on a harsh operation".

Mr Olmert's comments came as he returned to Israel after a visit to the United States.

A Hamas spokesman, Sami Abu Zuhri, said the movement took such threats seriously, and would confront them head on. At least four more rockets were fired into Israel during the day.

On Thursday, a Palestinian girl was killed in an Israeli air raid following a Palestinian rocket attack which killed an Israeli man working on a kibbutz in southern Israel.

Talks nearly exhausted

Israel and Hamas, the militant Islamist movement that runs Gaza, have been in indirect talks about a truce for several months, using Egypt as mediator.

Mr Olmert said these efforts were nearly exhausted.

Militants in Gaza regularly fire rockets at southern Israel, a response, they say, to Israeli military operations on Palestinian territory.

Israel has sealed off the territory and blocks all but essential humanitarian supplies, while launching regular raids in an attempt to counter militant fire. A large ground operation aimed at ending militant rocket fire could be costly in terms of lives lost on both sides.

It is not clear at what point Israeli forces would then withdraw without militants resuming rocket fire.

Any agreement on a truce is expected to include a prisoner exchange.

Israel has insisted that this include the release of Gilad Shalit, an Israeli soldier seized in a cross-border raid by Palestinian militants in 2006.