Civilians take brunt of 7th day of Gaza offensive

* Civilian death toll climbs

* Palestinian official says Egypt begins truce initiative

* Hamas leader threatens to abduct more Israeli soldiers

* Palestinian death toll reaches 429

* Protests turn violent in West Bank, Jordan

By Nidal al-Mughrabi

GAZA, Jan 2 (Reuters) - The civilian death toll climbed in Israel's air offensive against the Gaza Strip on Friday and Palestinian Islamists vowed revenge for the killing of a senior Hamas leader and his family.

There was no sign of a ceasefire on the seventh day of the conflict, in which at least 429 Palestinians have been killed and 2,000 wounded, but a Palestinian official told Reuters that Egypt had begun exploratory talks with Hamas to halt the bloodshed.

A United Nations agency said more than a quarter of those killed in Gaza were civilians. A leading Palestinian human rights group put it at 40 percent.

Exiled Hamas leader Khaled Meshaal urged Arabs in a televised speech from Damascus to step up aid to Gaza and to send medical teams. European and Arab countries had contacted Hamas to discuss ending the fighting, but he did not name them.

The senior Palestinian official, who declined to be named and who has been close to previous talks between Egypt and Hamas, said the aim of the talks included promoting ideas that would culminate in a new truce.

Four Israelis have been killed by Palestinian rockets fired from Gaza, which strike southern cities and towns at random and cause property damage and panic among the local population.

Meshaal warned Israel that Hamas would resist any Israeli ground invasion of the strip and might abduct soldiers. Militants said all options including suicide bombings were now open to "strike at Zionist interests everywhere".

"If you commit a foolish act by raiding Gaza, who knows, we may have a second or a third or a fourth Shalit," Meshaal said. Israeli soldier Gilad Shalit was kidnapped more than two years ago.

Of 10 Palestinians reported killed on Friday in more than 30 Israeli air strikes, seven were civilians, including five children, local medics said.

One missile killed three Palestinian children aged between eight and 12 as they played on a street near the town of Khan Yunis in the south of the strip. One was decapitated.

Islamist fighters earlier fired rockets at Israel's ancient port of Ashkelon, one of which blew out windows in an apartment building. Another house took a direct hit from a long-range missile later in the day, and cars were set ablaze.

A FEW ESCAPE

Israel's armoured forces remained massed on the Gaza frontier in preparation for a possible ground invasion, despite international calls for a halt to the conflict. An Israeli naval vessel offshore fired at a greenhouse in southern Gaza.

Israeli leaders were in conference on Friday evening and media reports said they were discussing an "imminent" incursion.

The White House said on Friday that Israel must decide for itself whether to go into the Gaza Strip with ground forces, but it cautioned any actions should avoid civilian casualties and ensure the flow of humanitarian goods.

In Gaza City, a few hundred foreign passport holders boarded buses in the pre-dawn murk to quit the Strip, with the help of the International Committee of the Red Cross, their governments and Israeli compliance.

"The situation is very bad. We are afraid for our children," said Ilona Hamdiya, a woman from Moldova married to a Palestinian. "We are very grateful to our embassy."

They left behind 1.5 million Palestinians unable to escape the conflict, a city facing another day of bombs, missiles, flickering electricity, queues for bread, taped-up windows and streets littered with broken glass and debris.

"We will not rest until we destroy the Zionist entity," said Hamas leader Fathi Hammad at the funeral of Nizar Rayyan, a senior Hamas leader who was killed along with four wives and 11 children in an air strike on Thursday.

The bearded Rayyan, who mentored suicide bombers and sent one of his sons on a "martyrdom" mission, was the highest ranking Hamas official to be killed in the current offensive. He had called loudly for bombings in Israeli cities.

Bracing for protests and retaliatory violence, Israel sealed off the occupied West Bank to deny entry to most Palestinians and beefed up security at checkpoints.

There were protests by Palestinians in West Bank cities. In Ramallah, Hamas supporters scuffled with the Fatah faction of Western-backed Palestinian President Mahmoud Abbas, taunting them as collaborators. Elsewhere, protesters stoned soldiers at checkpoints and some were wounded by rubber bullets.

In the Jordanian capital, Amman, riot police fired teargas to disperse hundreds of protesters marching on the Israeli embassy, chanting: "No Jewish embassy on Arab land".