Jerusalem - Israel's cabinet yesterday approved the call-up of thousands of reservists as the military deployed tanks close to the border with Gaza while pressing on with air strikes, suggesting a major ground invasion was being considered to follow the biggest single day of conflict in Gaza since the 1967 war.

    Ehud Olmert, Israel's prime minister, reportedly told a cabinet meeting the fighting in Gaza would be "long, painful and difficult". After two days of air raids, more than 290 Palestinians have been killed, and more than 600 injured. Gaza's hospitals, already short of supplies, had corpses lying on their floors as the morgues filled up.

    In an attempt to escape the mayhem, hundreds of Gazans broke through the border fence with Egypt at Rafah, where Palestinian gunmen and Egyptian border guards traded gunfire, killing one Egyptian and one Palestinian.

    Israeli air strikes hit 40 smuggling tunnels that had been dug under the border fence to alleviate Israel's blockade of the overcrowded strip.

    There were also Palestinian protests across the occupied West Bank in which crowds threw stones at Israeli forces. In one demonstration near Israel's West Bank barrier in the village of Nilin, Israeli troops shot dead a Palestinian protester and critically injured another.

    The UN security council called for a halt to the violence in Gaza and the UN high commissioner for human rights, Navi Pillay, said Israel's use of force was "disproportionate". But the US blamed Hamas, the Islamist movement which won Palestinian elections three years ago and then seized full control of Gaza last year, for the fighting. Israel and Palestinian militant groups in Gaza observed a ceasefire for six months which began to break down in November.

    In the first repercussions of the Israeli attacks, Syrian officials said they were pulling out of indirect peace talks with Israel which have continued over recent months through Turkish mediation. There was condemnation of Israel's actions elsewhere in the Arab world.

    Most of the dead in Gaza appeared to have been police officers but there have been civilian casualties. Several young people were killed in Gaza City on Saturday in a busy street by an Israeli air strike. Seven of the dead were students at a UN vocational college for Palestinian refugees. Another 20 students were injured in the attack.

    Israeli air strikes continued yesterday. A predawn raid destroyed the headquarters of the Hamas TV channel, al-Aqsa, but the station later resumed broadcasting. The main security headquarters in Gaza City was hit again and four were killed when most of its buildings were flattened. Last night, Israeli warplanes targeted the Hamas-affiliated Islamic University.

    Palestinian militants in Gaza continued to fire rockets into southern Israel, with two missiles reaching as far as Ashdod, an Israeli port 18 miles north of Gaza.

    At a regular weekly cabinet meeting in Jerusalem, Olmert's government approved the call-up of 6,500 reservist soldiers. "Israel will continue until we have a new security environment in the south, when the population there will no longer live in terror and in fear of constant rocket barrages," said Mark Regev, a spokesman for the prime minister.

    Israeli officials, including the foreign minister Tzipi Livni, have spoken openly of their wish to topple Hamas in Gaza. But most Israeli military analysts said they did not expect the military to seize full control of the Gaza strip again for fear it would cost the lives of hundreds of Israeli soldiers.

    Israel's actions come just weeks before a general election, due on 10 February. Livni, who is running second in the polls to win the elections, appeared to rule out a major ground invasion. "Our goal is not to reoccupy Gaza Strip," she said on NBC's Meet the Press programme.

    In Gaza the streets were largely empty yesterday. Most shops were closed and schools were shut. Hamas has sounded defiant in the face of the attacks with Khaled Meshaal, the group's political leader in exile, calling for a "third uprising" among Palestinians.

    But Palestinian president, Mahmoud Abbas, accused Hamas of provoking the Israeli raids by not extending the ceasefire.