Israeli troops have pushed into outlying neighborhoods in Gaza City, possibly signaling the onset of a new phase in the ground operation launched 17 days ago. Although in the first two days of the ground offensive the Israeli military had surrounded Gaza City, so far Israeli troops have not entered the dense urban sprawl of the Gaza Strip cities.

Now hundreds of Israeli troops have advanced several blocks into the neighborhoods of Zaytoun, Sheikh Ajleen, Tuffah, Tal el Hawa, Shejaeya, and Zeitun on the southern and eastern edge of Gaza City, according to reports.

Heavy fighting has also been reported in Beit Lahiya and Jabaliya, northeast of Gaza City.

Israeli troops, backed by air and artillery, also have moved into the southern Gaza city of Khan Younis; the operation appears to have been a raid.

Thousand of reserve troops that were called up at the beginning of the operation have entered the fight in Gaza. Additional reserve forces are in training to conduct operations for urban fighting.

No Israeli casualties have been reported during Monday's move into Gaza or Khan Younis. And in the 17 days of fighting so far, only 13 Israeli soldiers have been killed, compared to more than 350 Hamas fighters. Palestinian officials in Gaza claim an estimated 600 civilians have been killed.

Hamas has suffered significant casualties in some areas, a senior Israeli defense official told Ynet News.

"Hundreds of people were killed in the various combat sectors," the officer told the news agency. "Some Hamas companies and battalions were simply wiped out. We also see cases of desertions and unauthorized leaves, while some terror activists are scared to undertake moves that would jeopardize them vis-à-vis IDF troops."

Hamas is estimated to have between 15,000 and 20,000 armed fighters in the Gaza Strip.

The Israeli Defense Force has made leaders of Hamas' military and rocket and mortar teams a priority target. The leader of Hamas' rocket teams in Gaza City was killed on Jan 10, while the Israeli Air Force destroyed the home of the leader of Hamas' military wing in an air strike.

Israeli commanders said rockets fired from Gaza have been reduced by 50 percent since the operation began. But Hamas has been able to launch salvos despite ground and air operations. Hamas fired more than 21 rockets into Israel today.

Hamas may be under pressure to continue fighting despite a recent statement by Ismail Haniyeh, Hamas' political leader in the Gaza Strip, that he might be willing to implement a cease-fire. Iran has warned Hamas that its funding would be shut off if it cut a deal with the Israelis, an Egyptian government official told The Jerusalem Post.

"As soon as the Iranians heard about the Egyptian cease-fire initiative, they dispatched the two officials to Damascus on an urgent mission to warn the Palestinians against accepting it," the Egyptian government official said.

"The Iranians threatened to stop weapons supplies and funding to the Palestinian factions if they agreed to a cease-fire with Israel," the official continued. "The Iranians want to fight Israel and the US indirectly. They are doing this through Hamas in Palestine and Hezbollah in Lebanon."

Khaled Mashal, the overall leader of Hamas, who is based in Damascus, Syria, has called for Hamas to continue fighting.

Over the weekend both Hamas and Israel rejected the United Nations Security Council resolution to immediately implement a cease-fire.

But not all Palestinians are eager to continue the fighting. The spokesman for Fatah, the political party of President Mahmood Abbas, exposed the deep divisions between the rival Palestinian parties when he mocked Mashal.

"Khaled Mashal was talking [on Al-Jazeera] as if the Hamas tanks were surrounding Tel Aviv," he said. "It's obvious that Mashal has never been to the Gaza Strip and doesn't know what he's talking about."

Another unnamed Fatah official said Hamas officials would be tried as "war criminals" and labeled the group as a proxy of both Iran and Syria.

"The Iranians and Syrians are using Hamas to undermine the Palestinian Authority and other moderate Arab governments," the Fatah official told The Jerusalem Post. "Victory for Hamas in this war would mean victory for Iran, Syria and Hezbollah. This is something we need to prevent."

Hamas ousted Fatah from power in the Gaza Strip during running street battles last summer. Scores of Fatah fighters were killed or captured during the fighting.