A Palestinian firefighter participates in efforts to put out a fire from the wreckage of a house, which witnesses said was destroyed in an Israeli air strike. Picture: Mohammed Salem

Gaza City - Ground troops withdrew from the Gaza Strip on Sunday as Israel wrapped up an operation to destroy tunnels, but airstrikes continued, killing at least 15 Palestinians, among them 10 members of one family.

A military official said that most combat troops were back in Israeli territory by the morning. Officials stressed that some soldiers would remain in key positions, especially on the inside of the Gaza-Israel border, between the first lines of houses and the border fence.

They said they expected the tunnel demolitions to be completed within the next 24 hours, cutting off Palestinian militants' access to Israel to kill or capture soldiers or civilians.

“After completing the destruction of the tunnels, the IDF will reposition itself for the continuation of our campaign according to security requirements and only according to security requirements,” Prime Minister Benjamin Netanyahu said.

Hamas spokesman Sami Abu Zuhri said Israel would pay a price whether it remains in Gaza, withdraws or chooses to negotiate.

Israel announced late Saturday that it would no longer hold indirect talks with the Hamas Islamist movement in control of the Gaza Strip.

The army acknowledged on Sunday that a missing soldier earlier believed to have been captured had been killed in combat.

A special committee led by the military's chief rabbi concluded on the weekend that Lieutenant Hadar Goldin was killed on Friday.

The family had been informed and accepted the determination, based on “findings” in the area of the attack and on Jewish religious law, the military said.

Military operations continued especially in the southern Gaza town of Rafah, the scene of heavy fighting since Friday.

At least 10 Palestinians from the same family were killed in an airstrike on a house in Rafah, Gaza Health Ministry spokesman Ashraf al-Qedra said.

At least five others were killed in strikes in the central Gaza Strip.

Rafah has been the scene of fighting and airstrikes since Palestinian militants in the area crawled through a tunnel and attacked Israeli soldiers Friday morning, shortly after the start of a UN-requested humanitarian truce.

Two soldiers were killed by a suicide bomber and a third, Lieutenant Goldin, was believed snatched. But troops later found enough vital remains to determine he could not have survived.

The Palestinian death toll has risen to at least 1 737 since July 8, including about 400 children, the Gaza Health Ministry said.

Sixty-three Israeli soldiers, two Israeli civilians and a Thai national have also been killed in ground fighting with Palestinian militants and in rocket and mortar attacks.

Authorities say least 9,000 Gazans have been wounded and rights groups have estimated that more than 10 000 houses were destroyed or badly damaged by Israel.

More than 250,000 Palestinians - about 15 percent of the population -have fled their homes in Gaza. About half of the territory is deemed unsafe for civilians.

The US Senate on Friday unanimously approved an additional 225-million dollars for Israel's Iron Dome missile defence system, which has shielded Israel from most of the rockets being fired from Gaza. - Sapa-dpa