As violence in the Gaza Strip moved into the sixth day, international appeals for a UN-backed ceasefire between Israel and Palestinian militants failed to produce a result.
The Hamas refuses to accept defeat.
A United Nations Security Council debate on Israel's air offensive on the Gaza Strip has ended without a vote on a draft resolution calling for an immediate ceasefire. Diplomats said negotiations would be held in the next few days to try to reach an agreed text.
Emergency meeting of Arab League in Cairo, Dec. 31.
Western delegates described the resolution, which was presented by Libya and Egypt, as unbalanced in its current form. The US and UK criticized the draft for calling on Israel to end its air assaults while making no mention of Hamas rocket attacks against Israel, which they say started the latest hostilities.
The UN debate came just hours after the Arab League called on the Security Council to pass a resolution demanding that Israel stop its attacks.
Following an Arab League meeting in Cairo on Dec. 31, Saudi Foreign Minister Saud al-Faisal told reporters the ministers had strongly condemned what they described as barbaric aggression on the part of Israel.
On Sunday, the Security Council already called for an immediate end to all violence in Gaza, but this was dismissed by Israel.
Israel rejects temporary truce
Israel also rejected on Wednesday a European Union proposal for a 48-hour truce to allow humanitarian aid to be delivered to the Palestinian territory's 1.5 million residents, saying the time was not yet ripe to call a halt to the air raids that so far have killed some 390 people.
Prime Minister Ehud Olmert said Israel "did not launch the Gaza offensive only to end it while the rocket fire remains unchanged."
He said that "if the right conditions -- the kind we feel would guarantee better security realities in the south -- will present themselves, we would be willing to consider it, but we're not there yet."
Smoke rises from Israeli missile strikes in the northern Gaza Strip
Hamas prepared to continue fight
Hamas vowed on Wednesday to remain defiant if Israel makes good on threats to send ground troops into Gaza after rejecting calls for a truce.
"We in Hamas are ready for all scenarios and we will fight until the last breath," senior official Mushir al-Masri told AFP as Israeli media speculated that a ground offensive was imminent.
"Israel will embark on a veritable adventure if it decides to invade Gaza," he said.
In a defiant televised speech, the head of the Hamas government, Ismail Haniya, vowed Israel would be defeated. "Our people will defeat those tanks that await orders to perpetrate more massacres," he said and called for an unconditional end to Israeli aggression and blockade of the Palestinian territory.
"If the aggression is halted unconditionally and the blockade is lifted and the passages are opened, we can discuss all issues in a positive manner," Haniya said.
Diplomatic efforts continue
Some 500 Palestinians living in the Gaza strip have fled into Egypt
Despite the failure of ceasefire proposals and UN resolutions, European leaders continue to apply diplomatic pressure to bring an end to the fighting.
On Jan. 1 French Presiden Nicolas Sarkozy is scheduled to meet with Israeli Foreign Minister Tzipi Livni in Paris. French officials also confirmed that Sarkozy would visit the Middle East on Monday, but he is not scheduled to travel to Gaza.
Late Wednesday, US President George W. Bush spoke by phone to Israeli Prime Minister Ehud Olmert. According to the White House, Bush stressed the need for a ceasefire but put the onus on Hamas to stop firing rockets as a first step to a truce.
Humanitarian aid needed
Food supplies in the densely populated Gaza Strip are running low and there have been several power outages. Hospitals have been struggling to cope with the high number of casualties from the offensive.
According to the UN's relief agency, UNWRA, Gaza is facing a dire humanitarian situation and is on the brink of catastrophe.
The agency's Commissioner-General, Karen AbuZayd, said 20,000 people a day had been without food aid for two weeks. It said it will resume the distribution of food and medical supplies in Gaza on Jan. 1.
Israel also said it would continue to let humanitarian supplies into Gaza and that more than 90 truckloads with food and medicine would be permitted into the territory on Thursday. A similar amount of supplies were delivered on Wednesday.