Gaza/Tel Aviv - Israel pressed on with both its air and ground offensive in Gaza on Thursday, as government officials were due to travel to Cairo to discuss Egyptian-French truce proposals.

Residents reported heavy shelling in the southern Gaza border town of Rafah overnight, as an Israeli military spokesman said Israel bombed another 15 smuggling tunnels running under the border with Egypt, as well as what he said was the house of a militant commander who oversaw the rocket attacks from the Rafah area at nearby Israeli targets.

Some 5,000 residents of Rafah fled to two UN schools that had turned into shelters, after Israeli helicopters had dropped leaflets warning them to leave their homes along the Gaza-Egypt border, saying Hamas was using houses along the border to hide the entrances to the weapons smuggling tunnels.

The Israeli delegation traveling to Cairo Thursday includes Amos Gilad, the head of the Israeli Defense Ministry's Diplomatic-Security Bureau and caretaker Prime Minister Ehud Olmert's foreign policy adviser Shalom Turgeman.

Israel earlier on Wednesday said it viewed Egyptian-French attempts to reach a diplomatic solution to the Gaza crisis "positively."

But it also threatened to expand its ground offensive if the diplomatic attempts failed, with the Israeli cabinet in a meeting Wednesday authorizing the continuation of the Gaza offensive.

The Israeli delegation wants to discuss the possibility of a permanent American presence along the Gaza-Egypt border, as part of the "guarantees" it is seeking from the Egyptians and the international community that the smuggling of further rockets and parts into Gaza will stop, Israeli media reported.

Overall, the Israel Air Force bombed and rocketed some 60 targets overnight, including the house of a Hamas commander in the southern town of Khan Younis, a mosque "used to store rockets and as meeting point for Hamas militants" in northern Gaza and some 10 more "rocket storages," several of them in the houses of Hamas militants throughout the strip, the military said. (dpa)