Backdoor negotiations on the release of an Israeli soldier being held hostage by Palestinian militants continued Friday as Israel intensified its air assault on Gaza.

The Palestinian Interior Ministry was one of more than 30 targets hit by Israel's air force in Gaza in retaliation to Sunday's kidnapping of Cpl. Gilad Shalit, 19, by Hamas-linked militants.

Thousands of Israeli soldiers backed by tanks also have taken up positions in southern Gaza, ready to advance the offensive to the second level of a ground assault. Officials delayed the incursion Thursday in an effort to resort to diplomatic tactics.

Egyptian President Hosni Mubarak said terrorists agreed to a conditional release of the kidnapped soldier but that Israel had yet to accept their terms, which he did not specify. Israel said it was not familiar with any such offer.

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In remarks published Friday, Mubarak told the pro-government Egyptian newspaper Al-Ahram that "Egyptian contacts with several Hamas leaders resulted in preliminary, positive results in the shape of a conditional agreement to hand over the Israeli soldier as soon as possible to avoid an escalation. But agreement on this has not yet been reached with the Israeli side."

Gideon Meir, a senior Israeli Foreign Ministry official, said Israel did not know of such an offer and would have no comment until later Friday.

"The soldier will only be released unconditionally and there will be no negotiations with a gang of terrorists and criminals," Meir told The Associated Press. "There is nothing to talk with them about."

The Bush administration said Friday it hopes that Israel and Hamas can end the crisis.

Speaking to reporters aboard Air Force One, Bush's press secretary Tony Snow said: "There are two things: No. 1, Hamas must return the soldier. And we know there have been some offers — some public offers — by Hamas today to do that. ... The other thing we've said is that the Israelis need to practice restraint. And we are encouraged by the fact that the Israelis are standing down in Gaza and that Hamas is talking openly about repatriating the soldier, and we continue to watch the developments."

Snow said he is not aware of any direct consultations that Bush or his Cabinet are having with Israel.

In New York, the U.N. Security Council was to hold an emergency debate Friday on the Israeli attacks in Gaza, and the Palestinians said they will demand a resolution condemning Israel's aggression and demanding that it stop.

The United Nations said the destruction of the power plant had pushed Gaza to the edge of a humanitarian crisis, and the International Committee of the Red Cross said its officials were in talks with Israeli authorities to get the military blockade of Gaza lifted for shipments of aid.

"The ICRC is in negotiations with Israel in an effort to bring into Gaza medical supplies, ambulances and food parcels," said Red Cross spokesman Casper Landolt. "There is also a need for fuel since the bombing of the power station."

Earlier, Israeli Defense Minister Amir Peretz said significant diplomatic developments were possible, though he did not indicate there had been a breakthrough.

"Right now, our thoughts are focused on the unconditional liberation of the kidnapped soldier," he said in a speech to air force graduates. "The efforts to bring about his return are being carried out intensively through various channels."

Israel said the crisis will end when Cpl. Gilad Shalit is released.

"If the Palestinians act now to release Cpl. Shalit and hand him back to us ... we would immediately initiate a dramatic reduction in tension," Israeli Foreign Ministry spokesman Mark Regev said. "He is the primary issue, he is the primary reason for the crisis."

After previous diplomatic efforts by Egypt, Jordan, France and other nations failed, Israel sent thousands of soldiers into vacant areas of southern Gaza on Wednesday.

But on Thursday, Israel decided to delay a further offensive into northern Gaza at Egypt's request, an Israeli official said. The official spoke on condition of anonymity because of the secrecy of the diplomacy.

Israeli officials said the delay was also meant to defuse possible international criticism of a broad ground campaign in Gaza. In Moscow, foreign ministers from the Group of Eight industrialized nations called on the Palestinians to free the soldier and urged Israel to act with restraint.

Violence continued in the now five-day long offensive.

Israeli jet fighters destroyed the offices of his interior minister in Gaza, intensifying an air invasion while delaying a broad ground offensive.

On Friday evening, an Israeli aircraft attacked a vehicle in Gaza City that the military said was carrying militants. Witnesses said a missile exploded next to the car, wounding three occupants.

In the past 24 hours, Israel's air force struck roads, bridges and a power plant in Gaza. The army also has fired hundreds of artillery shells.

The United Nations said the destruction of the power plant had pushed Gaza to the edge of a humanitarian crisis, and the International Committee of the Red Cross said its officials were asking Israeli authorities to lift the Gaza blockade for shipments of food and medicine.

Palestinian security officials said an Israeli soldier was shot and wounded in clashes near the long-closed airport in southern Gaza. The army said it was investigating that claim.

In the pre-dawn attack on the Interior Ministry, Hamas minister Said Siyam's office went up in flames when a missile struck his fourth-floor room. The ground floor office of Siyam's bodyguard also was destroyed, while the first, second and third floors — where passports and ID cards are printed — were untouched. No casualties were reported.

The Interior Ministry is nominally in charge of the Palestinian security forces, but President Mahmoud Abbas stripped it of much of its authority in a power struggle after Hamas won January parliamentary elections. The Israeli military said the ministry was "a meeting place to plan and direct terror activity."

In a separate strike, three Israeli missiles hit the office of hard-line Interior Ministry official Khaled Abu Hilal, who heads a pro-Hamas militia.

Palestinian police and Hamas militiamen guarding the nearby Foreign Ministry fled immediately after that, fearing their building would be next, witnesses said. Haniyeh's office and Abbas' house are a few hundred yards from the Interior Ministry.

Haniyeh and nearly all his Cabinet members had not been seen since Shalit's kidnapping, fearing they could be killed or arrested.

In an unprecedented punishment Friday, Israel's Interior Ministry revoked the Jerusalem residency rights of four senior Hamas officials, officials said. The measure takes away their right to live in the holy city and travel within Israel freely.

Decoy convoys have been sent out ahead of any trips by Haniyeh, Siyam and Foreign Minister Mahmoud Zahar, who apparently also fear Israel will kill them as it did Hamas leaders Sheik Ahmed Yassin and Abdel Aziz Rantisi in 2004.

On Friday, the army said it attacked a group trying to fire an anti-tank missile at forces in southern Gaza. Mohammed Abdel Al, 25, of the Islamic Jihad militant group, was killed, making him the first casualty in the Israeli offensive.

In the Jebaliya refugee camp in northern Gaza, three Fatah-affiliated gunmen were wounded in what they said was a fight against undercover Israeli forces. Israel denied it had ground forces in the area.

"The only activity is air and artillery," army spokesman Capt. Jacob Dallal.

Israeli ground troops have entered southern Gaza but have not yet penetrated the north.

The Al Aqsa Martyrs' Brigades claimed in a Gaza news conference Friday that it kidnapped a 22-year-old Israeli soldier in Nablus. However, the army said it was unaware of a new abduction.

In another development, Israeli troops exchanged gunfire with militants at a cemetery in the West Bank city of Nablus. Palestinian security officials said one militant was killed, but the army said two militants died.

The Associated Press contributed to this report.