In a day of violence, eight Palestinians were killed and more than 120 were wounded as Israeli forces in tanks and helicopter gunships raided Gaza City, battled by hundreds of local fighters.
Masked gunmen paraded the organs and limbs of the dead Israeli soldiers around Gaza after they were killed when their armoured personnel carrier drove over a bomb and was ambushed by militants firing rocket-propelled grenades.
The attack was one of the most devastating on the Israeli army in the Palestinian territories since the outbreak of the intifada in September 2000.
Hamas then tried to win the freedom of jailed fighters in return for the remains, an offer immediately rejected.
Gaza residents prepared for a further Israeli attack as the troops tried to retrieve their dead.
