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* Israel commandos, in night-time raid, clash with militants
* Gaza death toll reaches 160, includes many civilians
* Western leaders say ceasefire urgent, Germany plans mission
By Nidal al-Mughrabi and Jeffrey Heller
GAZA/JERUSALEM, July 13 Thousands fled their homes in a Gaza town on Sunday after Israel warned them to leave ahead of threatened attacks on rocket-launching sites, on the sixth day of an offensive that Palestinian officials said has killed at least 160 people.
Militants in the Hamas-ruled Gaza Strip kept up rockets salvoes deep into the Jewish state and the worst bout of Israel-Palestinian bloodshed in two years showed no signs of abating, and Western foreign ministers meeting on Sunday said a ceasefire was an urgent priority.
Israeli forces dropped leaflets into the town of Beit Lahiya near Gaza's northern border with Israel. They read: "Those who fail to comply with the instructions to leave immediately will endanger their lives and the lives of their families. Beware."
The Israeli military told the residents of three of Beit Lahiya's 10 neighbourhoods to get out of the town of 70,000 by midday on Sunday. U.N. officials said some 4,000 people had fled south to eight schools run by the world body in Gaza City.
A senior Israeli military officer, in a telephone briefing with foreign reporters, said Israel would "strike with might" in the Beit Lahiya area from the late evening hours on Sunday.
He did not say if this would include an expansion of an air and naval offensive into a ground operation in the north of the narrow, densely populated Mediterranean enclave.
"The enemy has built rocket infrastructure in-between the houses (in Beit Lahiya)," the officer said. "He wants to trap me into an attack and into hurting civilians."
At schools run by the United Nations Relief and Works Agency in Gaza City, Beit Lahiya residents arrived in donkey carts filled with children, luggage and mattresses, while others came by car or taxi. One man, still in his pajamas, said some inhabitants had received phone calls warning them to clear out.
"What could we do? We had to run in order to save the lives of our children," said Salem Abu Halima, 25, a father of two.
The Gaza Interior Ministry, in a statement on Hamas radio, dismissed the Israeli warnings as "psychological warfare" and instructed those who left their homes to return and others to stay put.
Dozens of houses in parts of Beit Lahiya were levelled by Israeli bulldozers during a month-long Gaza war in late 2008 and early 2009. Israel says such structures provide cover for militants and rocket launchers.
The leaflets marked the first time Israel had warned Palestinians to vacate dwellings in such a wide area. Previous warnings, by telephone or so-called "knock-on-the-door" missiles without explosive warheads, had been directed at individual homes slated for attack.
135 PALESTINIAN CIVILIAN DEATHS
A Palestinian woman and a girl aged 3 were killed in Israeli air strikes early on Sunday, the Gaza Health Ministry said.
Hours before, 17 people were killed when the house of Gaza's police chief was bombed from the air - the single deadliest attack of Israel's offensive. Palestinian officials originally said 18 were dead, but doctors later revised the figure.
The Health Ministry said at least 160 Palestinians, including about 135 civilians - among them some 30 children, have been killed six days of warfare, and more than 1,000 have been wounded.
Hostilities along the Israel-Gaza frontier first intensified last month after Israeli forces arrested hundreds of Hamas activists in the Israeli-occupied West Bank following the abduction there of three Jewish teenagers who were later found killed. A Palestinian youth was then killed in Jerusalem in a suspected revenge attack by Israelis.
Despite intensified Israeli military action - which included a commando raid overnight in what was Israel's first reported ground action in Gaza during the current fighting - militants continued to launch rocket after rocket across the border.
A long-range burst on Sunday morning triggered air raid sirens at Tel Aviv's Ben-Gurion international airport, which has not been struck in the hostilities and where flights have been operating normally, and some city suburbs.
On Saturday night, Hamas - the Islamist movement that rules Gaza - made good on a threat to send rockets streaking toward Tel Aviv at 9 p.m. (1800 GMT) and other areas in heavily populated central Israel.
Hundreds of thousands of Israelis sought shelter as Palestinians in the streets of Gaza City cheered the launchings, the biggest strike yet on the Tel Aviv metropolitan area.
Those rockets and the ones unleashed on Sunday were intercepted by the Israeli-built, and partly U.S.-funded, Iron Dome missile defence system that has proved effective against Hamas's most powerful weaponry.
ISRAELI BEACHGOERS WATCH AS ROCKETS SHOT DOWN
No one has been killed by the more than 800 rockets the Israeli military said has been fired by Palestinians since the offensive began. During Saturday night's barrage, customers in Tel Aviv beachfront cafes shouted their approval as they watched the projectiles being shot out of the sky.
"We will continue to act with patience, forbearance, with determination, responsibility and aggression to achieve the goal of the campaign - restoring calm for a long period by dealing a significant blow to Hamas and other terrorist groups in the Gaza Strip," Israeli Prime Minister Benjamin Netanyahu said in broadcast remarks after meeting his cabinet.
"We don't know when this operation will be over, it may take a long time and we need your support and also your discipline," he said in a message to the Israeli public.
International pressure on both sides for a return to calm has increased, with the U.N. Security Council calling for a cessation of hostilities and Western foreign ministers meeting on Sunday to weigh strategy.
German Foreign Minister Frank-Walter Steinmeier will travel to the Middle East on Monday and meet Netanyahu and Palestinian President Mahmoud Abbas, German media reported.
Germany mediated a prisoner swap in 2011 in which an Israeli soldier held by Hamas was freed in exchange for more than 1,000 Palestinians jailed by Israel.
Israel says a ground invasion of Gaza remains an option, and it has already mobilised more than 30,000 reservists to do so, but most attacks have so far been from the air, hitting some 1,200 targets in the territory.
French Foreign Minister Laurent Fabius spoke of "a dangerous escalation" between Israel and Hamas and told reporters before talks in Vienna with his U.S., German and British counterparts that securing a ceasefire was "an absolute priority".
He and British Foreign Secretary William Hague said there was an urgent need to reinstate the truce struck in 2012.
Giving details of the naval commando operation early on Sunday, Lieutenant Colonel Peter Lerner, an Israeli military spokesman, said four members of the force were wounded in exchanges of fire with militants but the long-range rocket launching site they attacked was hit.
Hamas said its fighters had fired at the Israeli force offshore, preventing them from landing. Lerner said the forces had "completed their mission".
Hundreds of mourners attended the funerals on Sunday of the 17 Palestinians killed in the bombing of Gaza police chief Taysee Al-Basth's home. "With our souls and blood we will redeem the martyrs!" the crowd chanted as armed men fired in the air.
A Hamas source said Batsh was in critical condition and that all the dead were members of his family.
Ashraf Al-Qidra, spokesman for the Gaza Health Ministry, said 45 people were wounded in the bombing. An Israeli teenager was wounded on Sunday by a rocket that struck the southern town of Ashkelon, emergency services said. (Additional reporting by Maayan Lubell, Ari Rabinovitch and Allyn Fisher-Ilan in Jerusalem, John Irish, Fredrik Dahl and Louis Charbonneau in Vienna; Editing by Mark Heinrich)