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As Operation Cast Lead concluded its harshest 24 hours on Tuesday after the IDF lost five soldiers, senior defense officials revealed that the army was prepared to deploy in the entire Gaza Strip, if necessary.
Defense Minister Ehud Barak will decide in the coming days whether Israel should expand the ground operation against the Hamas terrorist infrastructure, they said.
Since the ground operation was launched on Saturday, IDF troops from several infantry and armored brigades have, according to Palestinian reports, taken up positions throughout northern Gaza - near Beit Lahiya, Beit Hanun, Jabalya, Saja'iya and al-Atatra.
Despite increasing international pressure on Israel to withdraw its troops, a senior official confirmed that plans had been drawn up to move troops into the south as well.
Four soldiers were killed in friendly-fire incidents that took place during fighting on Monday night.
Three soldiers were killed when a tank mistakenly opened fire on a home in Saja'iya occupied by officers and soldiers from the Golani Brigade. Another tank accidentally fired on a home in al-Atatra, killing an officer in the 202nd Battalion of the Paratroop Brigade.
The soldiers were Cpl. Yousef Moadi, 19, who lived recently in Haifa, but was originally from the Druse village of Yirka; Maj. Dagan Wertman, 32, from Ma'aleh Michmash in the Binyamin region; St.-Sgt. Nitai Stern, 21, from Jerusalem; and Capt. Yonatan Netanel, 27, from Kedumim.
On Tuesday morning, St.-Sgt. Alexander Mashevizky, 21, was killed and four other soldiers from a joint Golani-Engineering Corps force were lightly wounded in a gun battle with Hamas operatives in northern Gaza City.
Mashevizky, a member of an elite Engineering Corps unit, led the joint force, which was ambushed by Hamas gunmen while conducting ground sweeps. The Hamas operatives were reportedly hit by IDF fire.
Barak said Tuesday that Israel had paid a painful price for a bitter, unavoidable battle.
"It is a bitter battle, but an unavoidable one," he continued. "No peace-loving country can allow a terrorist organization to ruin daily life and embitter the lives of civilians."
A senior IDF officer said on Tuesday that Hamas had stepped up its attacks against troops based in the periphery of towns and villages in northern Gaza. Over 150 Palestinians have been arrested in Gaza.
There have also been a number of kidnapping attempts by Hamas operatives who pop out of tunnels and try to grab soldiers.
If the IDF decides to expand its operations, it may send some of the reservists who have been training in the South into the Gaza Strip.
"Hamas is trying to draw us inside the built-up areas," said a senior IDF officer, speaking by a secure phone line from the field. "Hamas is trying to avoid a classic battle with us. Last night, we had a suicide bomber who tried to break into a compound and blow up, and the force responded quickly. There is also sniper fire from hundreds of meters away, and when we get into buildings there is a lot of mortar fire."
In spite of the fierce fighting, diplomatic activity has begun to gain steam, and defense officials predicted that Operation Cast Lead could be over in the coming week if a diplomatic resolution is achieved.
The IDF is conditioning its acceptance of a new cease-fire with Hamas on the establishment of a supervision mechanism in the Gaza Strip and the creation of a force based along the Egyptian side of the Philadelphi Corridor to prevent the smuggling of weaponry and explosives from Egypt into Gaza.
Amid international criticism over civilian deaths and increasing calls for a cease-fire, IDF soldiers edged closer to two major Gaza towns on Tuesday.
A total of 58 Palestinians were killed Tuesday, including 30 who were reportedly killed in an IDF mortar attack on a Jabalya school from which Hamas was launching mortars into IDF positions. The IDF said that several Hamas gunmen were among those killed in the school.
Senior officers said the IDF would likely deepen its operations in Gaza in the coming days.
Since it took up positions in northern Gaza, the IDF said Hamas was having difficulty in launching long-range Katyusha rockets against Ashdod and Beersheba.
"Unless Hamas comes to its senses, we will find ourselves in other parts of the Gaza Strip," a senior officer said. "Hamas is determined, and this operation is not a walk in the park."
The IAF also struck the home of one of the founders of Hamas's rocket division on Tuesday. The IDF said that the terror chief, Iman Siam, was in his house at the time of the air strike in Jabalya.
The army said that in addition to being a founder of Hamas's rocket-launching program, Siam was the head of the group's artillery program throughout the Gaza Strip.
At least 10 Hamas and Islamic Jihad gunmen were killed in other Gaza battles early Tuesday, the IDF said, claiming that soldiers had killed close to 150 Hamas gunmen since the ground operation was launched on Saturday.
Paratroopers operating near the town of al-Atatra discovered a booby-trapped doll at the entrance to a smuggling tunnel. The doll-bomb was safely dismantled.
A Givati force entered a school on Monday night, and in the morning discovered that it was rigged with explosives that were connected to a piano in a nearby home.
In an overnight clash, paratroopers operating near al-Atatra spotted a suicide bomber and opened fire on him. The shooting triggered his explosive belt, which killed him when it detonated. One soldier was lightly wounded in the incident.
Elsewhere, a booby-trapped house was bombed. The IDF believed that under the house were a number of smuggling tunnels.
The IDF announced that it had conducted over 30 sorties during overnight operations late Monday and early Tuesday.
During the raids, IAF planes bombed the Jabalya home of Basal Abu Wadi, a prominent Hamas military officer who was at the level of a company commander in Izzadin Kassam.
The Jabalya home of another Hamas officer, Ashraf Guda, was destroyed in a different air strike. His house was said to function as a Hamas command and control center.
The house of a third company commander in the military wing, Iman Jalala, was also targeted overnight.
Around 40 rockets were fired at southern Israel on Tuesday, causing damage to structures. Six people people suffered from shock, but there were no other casualties.
Magen David Adom paramedics attended 37 rocket impact scenes throughout the day.
Yaakov Lappin contributed to this report.