GAZA CITY, Gaza Strip - Israel assassinated a top Hamas official in Gaza on Thursday in the first assault on the Hamas leadership since launching its crushing aerial offensive against the coastal enclave.
  
The air strike targeted the eight-storey apartment building that was home to Nizar Rayan, 52, ranked among Hamas' top five decision-makers in Gaza.

The attack killed 12 other people including two of Rayan's four wives and four of his 12 children, Palestinian health officials said. The Muslim faith allows men to have up to four wives.

While escalating its six-day-old military offensive against Hamas in Gaza, Israel also appeared to be sounding out a possible diplomatic exit from its campaign by demanding international monitors as a key term of any future truce.

The offensive is meant to crush Gaza militants who have been terrorizing southern Israel with rocket fire that is reaching closer to the country's heartland than ever before.

In launching the campaign Saturday, Israel made it clear that no one in Hamas was immune from its military wrath. The air strike blew a huge hole in the side of the building where Rayan lived and sent a thick plume of smoke into the air.

Most Hamas leaders went into hiding before Israel launched its operation, but Rayan was known for openly defying Israel.

Hamas threatened to take revenge against Israeli soldiers who were massed along the border with Gaza, waiting for a signal to invade.

"We are waiting for you to enter Gaza to kill you or make you into Schalits," it said, referring to Sgt. Gilad Schalit who was seized by Hamas-affiliated commandos 2 1/2 years ago and remains in captivity.

Earlier, Israeli warplanes bombed the parliament building in Gaza City and Israeli ships bombarded targets along the coast.

So far, the campaign to crush rocket fire on southern Israel has been conducted largely from the air, and a poll Thursday showed most Israelis aren't eager to see a ground push.

But thousands of Israeli ground troops have massed along the border in anticipation of a possible land invasion.

Military spokeswoman Maj. Avital Leibovich said preparations for a ground operation were complete.

"The infantry, the artillery and other forces are ready. They're around the Gaza Strip, waiting for any calls to go inside," Leibovich said.

Gaza officials said more than 400 people have died and 1,700 have been wounded since Israel began its aerial campaign Saturday.

The UN says at least 60 Palestinian civilians have died, 34 of them children.

In Israel, three civilians and a soldier have been killed by rocket fire that has reached deeper than ever into Israel, bringing one-eighth of Israel's population within rocket range.

"We have no interest in a long war. We do not desire a broad campaign. We want quiet," Prime Minister Ehud Olmert told a meeting of mayors of southern Israeli cities Thursday. "We don't want to display our might, but we will employ it if necessary."

Olmert, who rebuffed a French proposal for a two-day ceasefire, won't agree to a truce unless international monitors take responsibility for enforcing it, government officials said.

He has also made the same point in talks with U.S. Secretary of State Condoleezza Rice and other world leaders who are pressing for an end to the violence, they added.

International intervention helped Israel to accept a truce that ended its 2006 war with Lebanon's Hezbollah guerrillas, when the UN agreed to station peacekeepers to enforce the terms.

This time, Israel isn't seeking a peacekeeping force, but a monitoring body that would judge compliance on both sides.

The idea was floated before the offensive but did not gain traction because of the complications created by the existence of rival Palestinian governments in the West Bank and Gaza, defence officials said.

Gaza has been under Hamas control since it defeat the Fatah-aligned forces of Palestinian President Mahmoud Abbas in June 2007.

Abbas, who is more to the liking of Israel and the West and remains in control in the West Bank, has been attempting to negotiate an overall a peace deal with Israel for more than a year, but with little success.

An Abbas confidant said the Palestinian president supported the notion of international involvement. "We are asking for a ceasefire and an international presence to monitor Israel's commitment to it," aide Nabil Abu Rdeneh said.

Israeli cabinet ministers have been unswayed by a flurry of diplomatic activity, which is to include a whirlwind trip around the region next week by French President Nicolas Sarkozy.

Instead, they authorized the military to push ahead with its campaign against militants, who fired 21 rockets into Israel by midday Thursday, according to police. No injuries were reported, but an eight-storey house in Ashdod, 37 kilometres from Gaza, was hit.

The UN Security Council, meeting for emergency consultations Wednesday night, discussed but did not vote on an Arab request for a legally binding resolution that would condemn Israel and halt its attacks.

A draft resolution was labelled "unbalanced" by the United States because it made no mention of halting Hamas rocket fire at Israeli towns -- the immediate cause behind Israel's massive air offensive.

Echoing Israel's cool response to truce proposals, a senior Hamas leader with ties to its military wing said now was not the right time to call off the fight.

Hamas was unhappy with the six-month truce that collapsed just before the fighting began because it didn't result in an easing of Israel's crippling blockade against Gaza.

The blockade, reportedly an attempt to reduce support for Hamas among the general population, limited even everyday necessities to a trickle.