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Gaza offensive latest

By Simon McGregor-Wood, ABC News, Jerusalem  

No cease-fire is in sight in the mideast -- where the siege of Gaza went into its 20th day.  Eleven hundred Palestinians are reported dead in the violence.  Israeli forces show no sign of letting up.   They are expessing regret over an attack on a United Nations compound.  

The fighting has been getting worse - overnight and this morning Israeli forces have been advancing deeper into gaza city -  the shelling has been relentless - thousands of civilians have been forced from their homes in search of safety.  

This is the main UN compound in Gaza - fires burning out of control - three UN staffers injured and tons of food and medicine destroyed - all caused, according to eyewitnesses, by three Israeli shells.

"The fire has spread from workshops via the oil and spread to the warehouses," said Judy Clark, assistant to the UN War Director in Gaza.

One by one the warehouses are going up the israeli defense minister said the attack had been a grave mistake.  Also in Gaza City, Israeli shelling hit this building housing international media - two journalists were injured. As the fighting intensifies - so too does the diplomatic momentum to try and  stop it - in Tel Aviv this morning UN Secretary General  Ban Ki Moon - meeting Israel's defense minister and then with its foreign minister, Tzipi Livni.

"The time has come for the violence to stop and for us to change fundamentally the dynamics in Gaza and to pursue again the peace talks for a  two state solution," said UN Secretary-General Ban Ki-Moon.  

But the real deal making is happening in Cairo - where Egyptian mediators are trying to forge an agreement for a long-term ceasefire.

There are signs of an emerging deal but still many sticking points to be overcome - how to lift the blockade on Gaza and how to prevent Hamas from rearming - we may be reaching the endgame - but in the streets of Gaza City today you'd never know it.

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