A Palestinian wheels an elderly woman as they flee their homes in the Gaza's Shijaiyah neighborhood, northern Gaza Strip, Sunday, July 20, 2014. A Gaza City neighborhood came under heavy tank fire Sunday as Israel widened its ground offensive against Hamas, causing hundreds of panicked residents to flee, including a woman in a wheelchair waving a white flag.

Image Credit: AP Photo/Hatem Moussa

JERUSALEM - Escalating their ground offensive, Israeli troops backed by tanks and warplanes battled Hamas militants in a crowded neighborhood of Gaza City early Sunday. The fighting, including heavy Israeli tank fire, killed scores of Palestinians, forced thousands to flee and damaged or destroyed dozens of homes.

Palestinian health officials reported at least 65 people killed as air and artillery strikes echoed across the city for hours. They put the number of displaced at 35,000.

At least 425 Palestinians and 20 Israelis have been killed in the near two-week conflict which escalated as U.N. chief Ban Ki-moon headed to the region to try to revive cease-fire efforts.

U.S. Secretary of State John Kerry, meanwhile, said he expects to come to the Middle East in coming days and that he support's Egypt's call for an immediate cease-fire, rejected last week by Hamas. The Islamic militants say they want guarantees that Gaza's border blockade will be eased before agreeing to stop fighting.

Kerry told NBC's "Meet The Press" program on Sunday that he is siding with Egypt, saying that "you cannot reward terrorism," referring to Hamas.

Sunday's battle in Gaza City's Shijaiyah neighborhood was the deadliest so far in Israel's 3-day-old ground offensive, which followed 10 days of heavy airstrikes on targets linked to Gaza's Hamas rulers. Israel has said it sent thousands of troops into Gaza to destroy Hamas rocket launchers and tunnels dug by the Islamic militants to sneak into Israel.

The Israeli military said 8 percent of more than 1,700 rockets fired at Israel since July 8 came from Shijaiyah.

Residents of the neighborhood said Israeli tanks entered after midnight and fired heavily.

"The gate of hell has opened, and shrapnel came through the windows," Shijaiyah resident Jawad Hassanain said by phone. He said he and his family sought shelter in a nearby building after their house shook from the explosions.

"From 12:30 a.m. until 4 a.m., all you could hear is heavy bombardment, the smell of fire and the smell of death. By 4:30, and after the call for the prayer, we were able to get in an ambulance," which took them to his sister's neighborhood, he said.

After daybreak, dozens of wounded from Shijaiyah were rushed to Gaza's central Shifa Hospital. Frantic parents carried children bloodied by shrapnel, and the emergency room quickly overflowed, forcing doctors to treat some patients on mattresses in a hallway.

During a brief Red Cross-brokered lull, paramedics entered the neighborhood to retrieve the dead, pulling bodies from the rubble of homes. Dozens of houses over several blocks were destroyed or badly damaged, a scene reminiscent of Israel's last major incursion into Gaza more than five years ago when large areas near the border with Israel were devastated.

Palestinian medics carry a wounded woman to an emergency room at Shifa hospital in Gaza City, Sunday, July 20, 2014.

Image Credit: AP Photo/Khalil Hamra

Palestinian health officials said at least 65 people were killed and 288 wounded in Shijaiyah, bringing the overall Palestinian toll since July 8 to 425 dead and some 3,000 wounded. Close to half of the dead were killed since the start of the ground offensive.

Israeli military casualties spiked in the fighting, with 13 killed Sunday, raising the total number of dead soldiers to 18. Two civilians have also died in mortar and rocket attacks. Dozens of soldiers have been wounded since the start of the ground operation, according to Israeli hospitals.

Lt. Col. Peter Lerner, a military spokesman, said the military met a "huge" level of resistance from Hamas militants in Shijaiyah, with anti-tank missiles, rocket-propelled grenades and automatic-weapons fired from houses and buildings.

He said that so far, 10 tunnel access shafts were found in the area.

Lerner said Shijaiyah had been a main rocket launching area and that were warned ahead of the offensive to leave the area.

"We are mobilizing in order to strike Hamas where it hurts," he said.

Israel says Hamas' network of tunnels is a highly-developed web which links rocket building, maintenance and launching sites and stretches well into Israel.

Smoke rises after an Israeli missile hit Shijaiyah neighborhood in Gaza City, northern Gaza Strip, Sunday, July 20, 2014.

Image Credit: AP Photo/Hatem Moussa

Speaking to CNN, Israeli Prime Minister Benjamin Netanyahu said Israel is only targeting militants in its campaign.

"All civilian casualties are unintended by us, but intended by Hamas. They want to pile up as many civilian dead as they can, ... it's gruesome," Netanyahu said. "They use telegenically dead Palestinians for their cause. They want the more dead the better."

Israel has also targeted homes of Hamas leaders, warning they would pay a high price.

Among those killed in Shijaiyah were a son, daughter-in-law and two grandchildren of Khalil al-Haya, a senior leader of the group. They were killed at the time of dawn prayers, Health Ministry official Ashraf al-Kidra said. Hamas' military wing said the cause of death as an airstrike on the family. Israel's military had no immediate comment.

Khalil al-Haya promised to avenge his son.

"We promise you, my people, a brilliant victory," he told a local Hamas radio station. "The blood of my son and the martyrs will not be wasted and resistance will continue."

Thousands of residents began fleeing Shijaiyah after daybreak, including a woman in a wheelchair who waved a white flag. Columns of smoke rose from the neighborhood as the sound of shelling echoed from inside.

Palestinians who fled their homes from Shajaiyeh neighborhood, arrive to Gaza City, northern Gaza Strip, Sunday, July 20, 2014.

Image Credit: AP Photo/Adel Hana

A man walking in the street said his son was trapped in the family house and that he needed someone to help rescue him. He then got into an ambulance to reach his house, but tank fire hit nearby and the ambulance quickly turned around to get away.

Gaza's Health Ministry later said 35,000 people fled Sunday's fighting.

Some residents tried to find refuge with relatives or at U.N. schools. Some 81,000 Palestinians are already staying in United Nations shelters, according to UNRWA, the U.N. refugee agency for Palestinians.

The number of people who have fled their homes has more than tripled since the start of Israel's ground operation and the agency said it planned to open more schools.

In the southern town of Khan Younis, an airstrike targeted the home of a field commander of another militant group, Islamic Jihad. The man survived, but the strike killed his 15-year-old daughter and three others, according to the Palestinian Red Crescent.

The heavy fighting came as Ban headed to Qatar to try to push stalled cease-fire efforts forward.

He was set to meet Western-backed Palestinian President Mahmoud Abbas in the Gulf state, Abbas' spokesman said. Abbas also plans to meet Hamas' top leader Khaled Mashaal.

Hamas last week rejected an Egyptian call on both sides to halt hostilities, saying it first wants guarantees that Israel and Egypt will significantly ease their border blockade of Gaza, which has been ruled by the Islamic militant group since 2007.

Hamas has sought involvement of other countries, such as Qatar, in any cease-fire negotiations. The militant group is deeply distrustful of Egypt's rulers, who last year deposed a Hamas-friendly government in Cairo.

Meanwhile, the Organization of Islamic Cooperation, which represents 57 Muslim-majority nations, condemned Israel's offensive and urged the U.N. Security Council to take immediate action.

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Enav reported from Jerusalem. Associated Press writers Tia Goldenberg in Jerusalem and Ibrahim Barzak contributed to this report.

News from © The Associated Press, 2014