Israel defended its actions as it came under further fire over the week-old Gaza lock-down, which has raised fears of a humanitarian crisis in the impoverished Hamas-ruled strip of land.

The United Nations said at least 700,000 Gazans - nearly half the territory's population of 1.5 million - have poured into Egypt to stock up on desperately needed supplies since the border was blasted open on Tuesday.

Israeli Prime Minister Ehud Olmert and Palestinian president Mahmoud Abbas are to discuss the crisis at a meeting on Sunday, an Israeli official said, the latest in a series of regular encounters since peace talks were revived in November.

US Secretary of State Condoleezza Rice has called on Egypt to control its border with the Gaza Strip.

"I understand it is a difficult situation for them (Egypt)," Dr Rice said after arriving in Colombia for meetings.

"But it is an international border, it needs to be protected and I believe that the Egyptians understand the importance of doing that."

'Collective punishment'

In New York, UN Security Council talks to hammer out a statement urging an end to the siege dragged on for a fourth day as Washington called for the text to be reworked.

The United States, Israel's staunchest ally, insists the blockade is an act of self-defence but other states have protested at what they term "collective punishment".

Mr Olmert's government last week blocked fuel and aid shipments into Gaza amid an explosion of violence which has seen more than 40 people, most of them militants, killed in Israeli raids over the past 10 days.

Israel says its action is aimed at halting militant rocket fire on its territory, with 10 people lightly wounded over as many days from a barrage of 200 rockets or mortar rounds.

President Shimon Peres has rejected accusations the blockade is designed to punish ordinary people.

"We wouldn't want to see the people suffer," he told reporters at the World Economic Forum in Davos.

"All these stories about collective punishment is nonsense. For us, children are children whether they are Palestinians or others. We would like to see them living in peace.

"The problem is really Hamas... They want to destroy. There must be an all-embracing effort to prevent them from doing it. They are making the Gazan people suffer, totally unnecessarily and totally without hope."

Palestinian prime minister Salam Fayyad, whose government is based in the West Bank and has no control over Gaza since Hamas seized control in a bloody takeover last June, called the crisis "absolutely disastrous".

"This is a pressure cooker kind of situation and a very damaging situation, one that threatens to spiral out of control," Mr Fayyad said at Davos.

The fighting has threatened Israeli-Palestinian peace talks which were relaunched amid great fanfare at a US conference two months ago but have faltered since.

Although Israel eased the lock-down on Tuesday by allowing in limited fuel and aid supplies, Mr Olmert has vowed to keep up the pressure as long as militants continue to fire rockets and mortars into Israel.

Human flood

Since militants set off explosions bringing down stretches of the walls that mark the border between Gaza and Egypt in the divided town of Rafah on Tuesday night, hundreds of thousands of Gazans have flooded out.

"Around 400,000 people crossed yesterday and at least 300,000 have crossed so far today," the Cairo director of the UN Relief and Works Agency for Palestinian refugees said.

The Rafah border area resembled a busy bazaar on Thursday. Stands selling falafel and other fast-foods sprouted up to cater to the throngs of shouting, jostling people, intent on buying goods on the Egyptian side of the border.

"They want everything because there's nothing in Gaza," said pharmacist Hajj Khalil, dumbfounded by the rush on his stocks which have left his shop shelves virtually empty.

"The only things I have left are beauty products. Antibiotics sold out the quickest. Now I've sold everything and I'm waiting for more stocks to come from Cairo."
Source: By Australian Broadcasting Corporation