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* International push for ceasefire focuses on Cairo
* Rocket and air strikes go on
* Deaths top 100, but figures show fighting has eased
By Nidal al-Mughrabi and Maayan Lubell
GAZA/JERUSALEM, Nov 20 (Reuters) - International pressure for a ceasefire in the Gaza Strip puts Egypt's new Islamist president in the spotlight on Tuesday after a sixth day of Palestinian rocket fire and Israeli air strikes that have killed more than 100 people.
Israel's leaders weighed the benefits and risks of sending tanks and infantry into the densely populated coastal enclave two months before an Israeli election, and indicated they would prefer a diplomatic path backed by world powers, including U.S. President Barack Obama, the European Union and Russia.
Israeli Prime Minister Benjamin Netanyahu and his top ministers debated their next moves in a meeting that lasted into the early hours of Tuesday.
"Before deciding on a ground invasion, the prime minister intends to exhaust the diplomatic move in order to see if a long-term ceasefire can be achieved," a senior Israeli official, speaking on condition of anonymity, said after the meeting.
Any diplomatic solution may pass through Egypt, Gaza's other neighbour and the biggest Arab nation, where the ousting of U.S. ally Hosni Mubarak and election of President Mohamed Mursi is part of a dramatic reshaping of the Middle East, wrought by the Arab Spring and now affecting the Israeli-Palestinian conflict.
Mursi, whose Muslim Brotherhood was mentor to the founders of Hamas, took a call from Obama on Monday telling him the group must stop rocket fire into Israel - effectively endorsing Israel's stated aim in launching the offensive last week. Obama, as quoted by the White House, also said he regretted civilian deaths - which have been predominantly among the Palestinians.
"The two leaders discussed ways to de-escalate the situation in Gaza, and President Obama underscored the necessity of Hamas ending rocket fire into Israel," the White House said.
"President Obama then called Prime Minister Netanyahu of Israel and received an update on the situation in Gaza and Israel. In both calls, President Obama expressed regret for the loss of Israeli and Palestinian civilian lives."
Three Israeli civilians and 108 Palestinians have been killed. Gaza officials say more than half of those killed in the enclave were civilians, 27 of them children.
Mursi has warned Netanyahu of serious consequences from a ground invasion of the kind that killed more than 1,400 people in Gaza four years ago. But he has been careful not to alienate Israel, with whom Egypt's former military rulers signed a peace treaty in 1979, or Washington, a major aid donor to Egypt.
A meeting on Tuesday in Cairo between Mursi and Ban Ki-moon, the secretary-general of the United Nations who flew in late on Monday, could shed light on the shape of any truce proposals.
Egyptian Prime Minister Hisham Kandil told Reuters: "I think we are close, but the nature of this kind of negotiation, (means) it is very difficult to predict."
Israeli media have said Israeli officials are also in Cairo to talk. Ban is due to meet Netanyahu in Jerusalem soon.
After Hamas leader Khaled Meshaal laid out demands in Cairo that Israel take the first step in restoring calm, and warned Netanyahu that a ground war in Gaza could wreck his re-election prospects in January, a senior Israeli official denied a Hamas assertion that the prime minister had asked for a truce.
"Whoever started the war must end it," Meshaal said, referring to Israel's assassination from the air on Wednesday of Hamas's Gaza military chief, a move that followed a scaling up of rocket fire onto Israeli towns over several weeks.
An official close to Netanyahu told Reuters: "Israel is prepared and has taken steps and is ready for a ground incursion which will deal severely with the Hamas military machine.
"We would prefer to see a diplomatic solution that would guarantee the peace for Israel's population in the south. If that is possible, then a ground operation would no longer be required," he added. "If diplomacy fails, we may well have no alternative but to send in ground forces."
Fortified by the ascendancy of fellow Islamists in Egypt and elsewhere, and courted by fellow Sunni Arab leaders in the Gulf keen to draw the Palestinian group away from old ties to Shi'ite Iran, Hamas has tested its room for manoeuvre, as well as longer-range rockets that have reached the Tel Aviv metropolis.
Israeli statistics showed some easing in the ferocity of the exchanges on Monday. Israeli police counted 110 rockets, causing no casualties, of which 42 were shot down by anti-missile batteries. Compared with more than 1,000 rockets fired in total, the indications were that the level of violence had fallen.
Palestinian militants resumed rocket fire into Israel on Tuesday morning, sending Israelis in southern towns running for shelter.
Israel's military said it had conducted 100 air strikes throughout the night. "A financial institution used by Hamas to fuel its terror activity was targeted in the northern Gaza Strip," it said.
Hamas said 4-year-old twin boys had died with their parents when their house in the town of Beit Lahiya was struck from the air. Neighbours said the occupants were not involved with militant groups.
Israel had no immediate comment on that attack. It says it takes extreme care to avoid civilians and accuses Hamas and other militant groups of deliberately placing Gaza's 1.7 million people in harm's way by placing rocket launchers among them.
Nonetheless, fighting Israel, whose right to exist Hamas refuses to recognise, is popular with many Palestinians and has kept the movement competitive with the secular Fatah movement of Palestinian President Mahmoud Abbas, who remains in the West Bank after losing Gaza to Hamas in a civil war five years ago.
"Hamas and the others, they're our sons and our brothers, we're fingers on the same hand," said 55-year-old Faraj al-Sawafir, whose home was blasted by Israeli forces. "They fight for us and are martyred, they take losses and we sacrifice too."
Thousands turned out on Monday to mourn four children and five women who were among 11 people killed in an Israeli air strike that flattened a three-storey home the previous day.
The bodies were wrapped in Palestinian and Hamas flags. Echoes of explosions mixed with cries of grief and defiant chants of "God is greatest!"
Israel said it was investigating the strike that brought the block crashing down on the al-Dalu family, where the dead spanned four generations. Some Israeli newspapers said the house might have been targeted by mistake.
For the second straight day, Israeli missiles blasted a tower block in the city of Gaza housing international media. Two people were killed there, one of them an Islamic Jihad militant.
In scenes recalling Israel's 2008-2009 winter invasion of the coastal enclave, tanks, artillery and infantry have massed in field encampments along the sandy, fenced-off border.
Israel has also authorised the call-up of 75,000 military reservists, so far mobilising around half that number.
Although 84 percent of Israelis support the current Gaza assault, according to a poll by Israel's Haaretz newspaper, only 30 percent want an invasion.
With the power balances of the Middle East drastically shifted by the Arab Spring during a first Obama term that began two days after Israel ended its last major Gaza offensive, the newly re-elected U.S. president faces testing choices to achieve Washington's hopes for peace and stability across the region.
In an echo of frictions over the civil war in Syria, Russia accused the United States on Monday of blocking a bid by the U.N. Security Council to condemn the escalating conflict in the Gaza Strip. Washington has generally stopped the U.N. body from putting what it sees as undue pressure on its Israeli ally.