Said Siyam was one of the top Hamas leaders in the Gaza Strip
One of the top Hamas leaders in Gaza has been killed in an air strike, Hamas and Israeli officials have said.
Said Siyam, the Hamas interior minister, was killed in an air raid on his brother's home near Gaza City.
Earlier, Israeli troops and tanks moved closer into the heart of Gaza City, engaging in fierce gun battles with fighters from Hamas.
The UN's relief agency, Unrwa, said part of its HQ in Gaza caught fire after being hit by Israeli shells.
Senior figure
As interior minister, Mr Siyam controlled thousands of Hamas security troops in Gaza and was said to be widely feared.
His son and brother were also killed in the strike, along with two other Hamas officials - the interior ministry's security director Saleh Abu Sharkh and the local leader of the Hamas militia, Mahmoud Abu Watfah.
PROFILE: SAID SIYAM Born: 1959, Shati refugee camp Six children - two boys, four girls Member of Hamas Political Bureau Elected to Palestinian Legislative Council in 2006; top Hamas MP Became Hamas interior minister in 2007, after serving one year as Palestinian interior minster Said to have become member of Hamas "collective leadership" in Gaza after 2004 killings of Sheikh Yassin and Abdel-Aziz Rantissi Created Hamas Executive Force, a paramilitary which played key role in take-over of Gaza in June 2007 Killed in Israeli air strike on 15 January 2009
Obituary: Hamas leader Said Siyam
Mr Siyam is one of the most senior Hamas leaders killed in the 20-day Israeli operation in the Gaza Strip aimed at stopping Palestinian rocket fire into Israel.
He became a member of the "collective leadership" of the militant group in 2004 after Sheikh Yassin and Abdel-Aziz Rantissi were assassinated by Israel.
His death came at the end of a day of fierce clashes which also saw the UN compound in Gaza City shelled by Israeli troops.
UN Relief and Works Agency (Unrwa) spokesman Christopher Gunness said three of the agency's employees were hurt in the attack.
About 700 people were sheltering in the compound at the time, he said, and the fire burnt through stocks of food and medicine, approaching five full fuel tanks.
Mr Olmert met UN Secretary General Ban Ki-moon in Tel Aviv and apologised for the attack, but said Palestinian fighters had been firing from the UN site.
"It is absolutely true that we were attacked from that place, but the consequences are very sad and we apologise for it," he said.
"I don't think it should have happened and I'm very sorry."
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The Gaza Strip was subjected to a punishing series of air strikes overnight and shell-fire raked the coastal enclave as soldiers and tanks pushed into Gaza City.
The advancing troops came under fire from fighters from Hamas and other Palestinian factions positioned on rooftops and balconies, said the BBC's Rushdi Abualouf.
The building where he lives in the Gaza City suburb of Tel al-Hawa was surrounded by Israeli tanks at one point, he said, and several shells hit the lower floors.
At least one hospital in Gaza City - al Quds, run by the Palestinian Red Crescent - was hit by shellfire, but no injuries were reported.
A tower block housing offices from several media companies was also hit. One journalist from the Abu Dhabi television channel was injured.
Columns of thick smoke rose into the sky over Gaza as the fighting carried on through the day.
A total of 1,083 people in Gaza have now been killed since the Israeli operation began, Gaza's Ministry of Health said on Thursday - 70 higher than the previous day's figure. Nearly a third of the dead are children, Gaza medics said.
Thirteen Israelis - including three civilians - have died. Two-hundred-and-thirty-three soldiers have been wounded, an Israeli army spokesman said.
As the clashes continued in Gaza, about 25 rockets were fired from the territory into southern Israel, Israeli police said.
Eight people were injured in Beersheba from the rocket fire, Israeli medical officials said.
Humanitarian crisis
As Gaza saw one of the fiercest days of fighting since the conflict began on 27 December, international condemnation of the Israeli operation grew.
In the midst of a Middle East tour to rally support for an end to the fighting, Mr Ban repeated previous calls for an immediate ceasefire.
He said the suffering in Gaza was a "dire humanitarian crisis" that had reached an "unbearable point".
Meanwhile, Hamas and Israeli negotiators were said to be making progress towards a ceasefire agreement as they held separate meetings with Egyptian mediators in Cairo.
Egypt has been leading efforts to broker a ceasefire that could include a peacekeeping force being deployed along its border with Gaza to prevent the smuggling of weapons.
Hamas has said any ceasefire agreement would have to include a halt to Israeli attacks, the complete withdrawal of Israeli forces and the opening of border crossings to end the blockade of Gaza.
Israel wants an end to rockets being fired into Israel from the Gaza Strip and an internationally-supported mechanism to ensure that Hamas can not re-arm in the future.
Israel has refused to allow international journalists to enter Gaza without supervision, making it impossible to independently confirm casualty figures.
Berichten zufolge sind am gestrigen Donnerstag israelische Granaten auf einem UN-Areal eingeschlagen. Dort befinden sich neben dem Hauptquartier des Hilfswerks der Vereinten Nationen für Palästina-Flüchtlinge im Nahen Osten (UNRWA) auch eine Schule sowie Lagerräume für Hilfsgüter und Treibstoff. Zum Zeitpunkt des Angriffs hielten sich nach Angaben eines UN-Sprechers auch palästinensische Flüchtlinge auf dem Gelände auf. Bei dem Angriff ging ein Gebäude in Flammen auf, drei UN-Mitarbeiter wurden verletzt. Der Sachschaden lasse sich aufgrund der starken Rauchentwicklung noch nicht genauer beziffern, so der Sprecher weiter. Israels Verteidigungsminister Ehud Barack entschuldigte sich für den Vorfall und versicherte, dass sich so etwas nicht wiederholen werde.

Unterdessen gaben die israelischen Streitkräfte bekannt, dass sie Said Siam, den Innenminister der Hamas, getötet hätten. Dies wurde seitens der Hamas bestätigt. Siyam war seit 2006 Innenminister, zunächst in der Regierung der palästinensischen Autonomiegebiete und später in der Hamas-Regierung des Gazastreifens. Ihm unterstand eine 13.500 Mann starke paramilitärische Truppe, die eine wesentliche Rolle bei dem Machtkampf um Gaza spielte.