CAIRO/GAZA/JERUSALEM (Dec 21): Fighting in the Gaza Strip escalated on Thursday with some of the most intense Israeli bombardment of the war and Hamas demonstrated its ability to rocket Tel Aviv, even as the enemies held their most serious talks for weeks on a new truce.

Israeli bombing was at its most intense over the northern part of the Gaza Strip where orange flashes of explosions and black smoke could be seen as morning broke from across the fence in Israel. Planes roared overhead and the booms of air strikes thundered every few seconds, punctuated by rattling gunfire.

In Israel's commercial capital Tel Aviv, sirens wailed and rockets exploded overhead, intercepted by Israeli defences. Israel's Magen David Adom ambulance service said there were several impact points but no initial word on casualties.

The armed wing of Hamas said it had fired the salvo in response to Israeli killing of civilians. But with the group's leader in Cairo for truce talks, the attack seemed clearly timed to send a diplomatic message that 10 weeks of war that has laid waste to much of Gaza had failed to destroy the militants' strike capability.

Residents in Jabalia in the north of the Strip close to the Israeli border said the area was completely cut off with Israeli snipers now firing on anyone trying to escape.

"It was one of the worst nights in terms of the occupation bombings. Also we could hear heavy fighting despite that," said one Jabalia resident who asked not to be identified for fear of reprisal.

With Gaza's communications links shut down for a second day, the resident spoke to Reuters by phone using an electronic SIM card to access the Israeli mobile network across the fence. Gazans say such cuts to communication links have typically heralded Israeli assaults.

In a social media post, the Palestinian Red Crescent said ambulances were now unable to reach large numbers of casualties inside Jabalia.

"We have received several appeals regarding continuous shelling on Al-Banna Street, Nazzala in Jabalia, northern Gaza, with dozens of martyrs and wounded individuals besieged there. Unfortunately, neither the emergency teams nor the rescue teams have been able to reach them," it said.

The World Health Organization said on Thursday the last hospital in the northern half of the Gaza Strip had effectively ceased functioning over the past two days, leaving no place left to take the wounded.

Talks serious, sides publicly far apart

The intensification of fighting comes even as diplomatic efforts have been ramped up in the final weeks of the year to stave off humanitarian catastrophe.

The sides are discussing a new truce to release some of the more than 100 hostages still held by militants who stormed Israeli towns on a killing spree on Oct 7. At the same time, the UN Security Council is working on a new plan to ramp up aid.

Hamas leader Ismail Haniyeh was in Egypt for a second day for negotiations, a rare personal intervention which in the past has signalled important stages in diplomacy. Islamic Jihad, another militant group, said its leader was also headed there.

The talks appear to be the most serious since a week-long ceasefire collapsed at the start of the month, but the public positions of the opposing sides are far apart. Israel says it will negotiate only on a temporary pause in fighting to free hostages; Hamas says it is interested only in negotiations that will lead to a permanent end to fighting.

"These are very serious discussions and negotiations, and we hope that they lead somewhere," White House spokesperson John Kirby told reporters aboard Air Force One on Wednesday. President Joe Biden said: "We're pushing."

Hamas said in a statement that Palestinian factions had taken a united position that there should be "no talk about prisoners or exchange deals, except after a full cessation of aggression".

Earlier, Taher Al-Nono, Haniyeh's media adviser, told Reuters: "We cannot talk about negotiations while Israel continues its aggression."

Israeli Foreign Minister Eli Cohen confirmed negotiations on a hostage release were ongoing but declined to provide details. He repeated Israel's position that war would not end while Hamas controls Gaza, and said there was "no talk of reducing the intensity, at least not in the coming weeks".

On Wednesday, Prime Minister Benjamin Netanyahu said in a statement: "Whoever thinks we will stop is detached from reality.... All Hamas terrorists, from the first to the last, are dead men walking."

Washington, Israel's closest ally, has told it in recent days to scale down its ground offensive, after Biden said "indiscriminate bombing" of Gaza was eroding global sympathy for Israel following the Hamas rampage.

Strike kills border crossing commander

Hamas officials said an Israeli air strike at the Rafah crossing to Egypt on Thursday morning killed four people including the Gaza director of another border crossing, Kerem Shalom. Israel's military appeared to deny involvement, saying it was not familiar with the incident.

Israel allowed Kerem Shalom to open this week, increasing aid volumes, though UN agencies say it remains a trickle compared to the vast needs.

Israel launched its campaign in the Gaza Strip with the aim of annihilating Hamas whose fighters raided Israel on Oct 7. They took some 240 hostages and killed 1,200 people, according to Israel, which says it cannot be safe until the group sworn to its destruction is eliminated.

Since then, nearly 20,000 Gazans have been confirmed killed, according to the Palestinian health ministry, with several thousand more bodies believed trapped under rubble. Nearly all of Gaza's 2.3 million people have been driven from their homes.

The UN Security Council was due to vote on Thursday on a resolution to boost aid after a delay at the request of the US. The draft would give the UN a wider role overseeing aid shipments, seen as diluting Israel's control.