GAZA CITY: Israel demanded international monitors as a key term of any future truce with Hamas militants, as its warplanes bombed the Parliament building in Gaza City yesterday and its ships attacked coastline positions of the territory's Islamic rulers.

Hamas, too, fired more rockets deep inside Israel, but said yesterday it would accept 'under conditions' a European Union (EU) proposal for a ceasefire.

'Hamas accepts this initiative on the condition that the aggression stops, that the blockade is lifted, that all the border crossings are opened and that it gets international guarantees that the occupier will not restart its terrorist war,' spokesman Fawzi Barhum said in a statement.

After a meeting of foreign ministers in Paris on Tuesday, the EU released a statement calling for an 'unconditional' stop to Hamas rocket attacks.

The rockets hit the Israeli cities of Beersheba, Ashdod and Ashkelon, but there were no casualties reported.

Prime Minister Ehud Olmert, who visited Beersheba city yesterday, insisted that Israel was not interested in 'long war' in Gaza, but said the country would 'deal with Hamas and terror with an iron fist'.

According to government officials, Mr Olmert reportedly told United States Secretary of State Condoleezza Rice and other world leaders that Israel would not agree to a truce unless international monitors took responsibility for enforcing it.

International agreement to set up such a monitoring force would give Israel a way to end its latest offensive against Hamas, even as thousands of Israeli ground troops massed along the border in anticipation of a possible land invasion. So far, the campaign to crush rocket fire on southern Israel has been conducted largely from the air.

Hamas security officials said buildings housing the education and transportation ministries had been virtually destroyed in the air attacks. The Palestinian Parliament building was also hit, they said.

'This is only the beginning,' Israeli Deputy Defence Minister Matan Vilnai said on Israel's Army Radio. 'We are operating now, for exactly what we have said from the start, and nothing has changed, to deal Hamas a heavy blow. It has already been wounded.'

He said Israel would insist on an end to all rocket fire from Gaza.

The latest bombings by Israel killed high-ranking Hamas leader Nizar Rayyan, at least three civilians and injured 100 people in Gaza, officials said. The Israeli offensive has so far left 400 Palestinians dead and 2,000 wounded, while four Israelis have been killed by Gaza rockets.

The Israeli military said its aircraft also bombed smuggling tunnels along the Gaza-Egypt border, part of an ongoing attempt to cut off Hamas' last lifeline to the outside world.

Israel's Haaretz newspaper reported yesterday that the army had recommended a major but short-term ground offensive. 'The infantry, artillery and other forces are ready. They are around the Gaza Strip waiting for any call to go inside,' Major Avital Leibovich said.

In New York, the United Nations Security Council held an emergency session on Wednesday, but adjourned it without a vote after Arab countries pushed for an immediate ceasefire.

Western delegates described an Arab- drafted resolution as unbalanced, as it made no mention of the ongoing Hamas rocket attacks on Israeli territory. They said negotiations would continue, even as Palestinian officials said yesterday that President Mahmoud Abbas will head for the UN to get a binding resolution to stop the Israeli offensive into Gaza.

Meanwhile, French President Nicolas Sarkozy plans to visit Jerusalem and the West Bank on Monday as part of a two-day Middle East tour. He was scheduled to meet Israeli Foreign Minister Tzipi Livni yesterday.

Czech Prime Minister Mirek Topolanek, whose country holds the EU presidency, is also planning a diplomatic mission on behalf of the EU to address the conflict.

ASSOCIATED PRESS, REUTERS, AGENCE FRANCE-PRESSE