Gaza-Israel violence rages, five militants killed

GAZA (Reuters) - Israel killed five Palestinian militants in a third straight day of air strikes on the Gaza Strip and militants fired dozens of rockets and mortar rounds at Israel, defying the efforts of mediators to stem the violence.

The death toll since Israel launched its retaliation for an attack on a school bus that critically wounded a teenager on Thursday climbed to 19 Palestinian militants and civilians.

Egypt and the United Nations were reported to be trying to achieve a ceasefire, but militants fired a new volley of rockets at southern Israel, causing no casualties but spreading panic.

An Israeli military statement said Gaza militants had fired 120 rockets and mortar rounds at Israel since Thursday, at least 50 of them on Saturday. It said eight were intercepted by a newly placed "Iron Dome" missile shield.

Hamas, the Islamist group which controls Gaza, said it alone fired 60 rockets and mortar rounds, and other militant groups said they also had a role in the attacks.

Israeli Prime Minister Benjamin Netanyahu held a strategy session with senior officials after the Jewish sabbath on Saturday evening to weigh future steps.

Cabinet minister Gideon Sa'ar said earlier that Israel would keep responding to the attacks from Gaza, where it closely controls the entry and exit of people and goods.

"We will not permit sporadic shootings or the disruption of life inside Israel," Sa'ar told Israel Radio. "We will continue ... to implement a principle of defending our citizens."

SOLDIER'S CAPTOR

Israel said one militant killed in Saturday's raids was a Hamas commander "directly and physically" involved in the capture of Israeli soldier Gilad Shalit, believed to be alive and to be being held in the coastal enclave.

Israel has tried to free Shalit, who was captured in a cross-border raid in 2006, through a prisoner swap with Hamas, but talks have bogged down over Israel's demand for the expulsion of some of the leading militants Hamas wants freed.

Israel blamed the same militant, Tayser Abu Snima -- killed in an air strike on a car in a Gaza town that borders Egypt -- for a rare rocket strike on the city of Eilat launched from the Sinai Peninsula some months ago.

Abu Ubaida, a spokesman for Hamas's armed wing, dismissed Israel's claims. "The enemy does not have the information about Shalit's capture to be able to say who among our leaders had a role in its execution," he said.

Abu Ubaida also said Hamas would reject any ceasefire with Israel. "There is no room to talk about calm between us," he said. "The blood of our people is very dear and cannot be in vain."

There were signs of efforts to stop the bloodshed.

Israel Radio said the U.N. Middle East envoy, Robert Serry, was trying to mediate a halt to the violence, and the Egyptian state news agency said Egypt was engaged in similar efforts.

A Palestinian official said the Arab League would discuss the fighting at a session in Cairo on Sunday.

Hamas spokesman Sami Abu Zuhri tried to step back from an earlier claim of responsibility for Thursday's attack on the Israeli bus. "It was not known that the bus targeted on the outskirts of Gaza carried schoolchildren," he told Reuters.

He said the road near the frontier was inside an "Israeli military zone" commonly used for attacks on Gaza.

Two years of periodic, low-level skirmishing on the border escalated suddenly last month when Hamas showered rockets on Israel. Hamas had largely withheld fire since a Gaza war in late 2008 in which 1,400 Palestinians and 13 Israelis were killed.

Political analysts have explained the conflagration as an effort by Hamas to divert attention from demands, fueled by pro-democracy unrest in the Arab world, for an end to its split with the Western-backed Fatah movement in the West Bank.

(Writing by Allyn Fisher-Ilan, editing by Tim Pearce)