The defiant leader of Hamas in the Gaza Strip vowed on Monday the Islamists would emerge victorious from the war in the Palestinian territory as Israeli tanks advanced on the main city. After 17 days of conflict which have so far killed 917 Palestinians, Hamas leader Ismail Haniyeh made a rare televised address only hours after his Israeli counterpart threatened to hit Hamas with an “iron fist” if it did not end the rocket attacks which the war itself is designed to halt. In contrast Israeli Prime Minister Ehud Olmert spoke in Ashkelon, in range of Hamas rockets and warned Hamas of an increase in fighting in the embattled Gaza Strip which is home to 1.5 million people. After nightfall, flares and explosions lit up the sky over Gaza and heavy gunfire was heard in parts of the coastal. Palestinian medics, meanwhile, said that at least another 25 people had been killed during the latest clashes, bringing the overall toll to 917, including 277 children. Another 4,100 have been wounded. Ten Israeli soldiers and three civilians have been killed in combat or by rocket attacks since the operation began on December 27. “I tell you that after 17 days of this foolish war, Gaza has not been broken and Gaza will not fall,” Haniyeh said. Haniyeh also said that the “blood of children” who have been killed in the conflict would serve as a “curse which will come back to haunt” US President George W. Bush. Hamas showed no sign of wavering: its fighters battled Israeli troops on the periphery of Gaza City and launched 15 rockets at southern Israel. Haniyeh insisted on an Israeli withdrawal from Gaza and the opening of blockaded border crossings as part of any truce. Ban steps in In an attempt to stem further fighting, UN Secretary-General Ban Ki-moon heads to the Middle East to speak to regional leaders in order to pressure them to end the fighting. Ban intends to meet with Egyptian President Hosni Mubarak, Israel's Prime Minister Ehud Olmert, King Abdullah of Jordan and Syrian President Bashar al-Assad. He will also go to Lebanon and Turkey to meet leaders there. But prior to his departure, Ban indicated he would not visit Gaza itself or have direct contact with leaders of Hamas. Instead he will talk to leaders of the Palestinian Authority in the West Bank. International Middle East envoy Tony Blair said after talks with Egyptian President Hosni Mubarak in Egypt on Monday that “the elements of an agreement of the immediate ceasefire are there and are now being worked on very hard in great detail.” Egypt has been trying to broker a ceasefire to halt the fighting on its northern border. A senior Western diplomat and a Hamas official called Monday's talks positive. “We want Hamas to understand there will be no possibility of smuggling arms into Gaza, because any such attempt will be met by the iron fist of the Israeli people,” Olmert said. “Nothing more, nothing less. If it takes time, it takes time.” Hamas negotiators returned to Cairo late on Monday after consulting the leadership in exile in Damascus. Hamas's leader in Gaza, Ismail Haniyeh, said on television that it was ready to negotiate a truce but insisted it would do so only if Israel pulled back all its forces and ended a blockade on Gaza. Western and Israeli officials said diplomats were discussing an internationally-assisted technical monitoring system to help Egypt stop weapons smuggling and intercept rocket shipments. Israeli warplanes have repeatedly bombed the Philadelphi corridor along Gaza's 14-km (nine-mile) border with Egypt, seemingly trying to damage tunnels. Western diplomats have said Israel might also decide to send in ground troops there. In Paris, the French foreign minister, Bernard Kouchner, said European military observers should be sent to Gaza to monitor any eventual cease-fire. Israel's chief military spokesman, Brig. Gen. Avi Benayahu, said the fighting was “difficult and complex” and that Hamas militants were setting boobytraps and firing missiles from the rooftops of civilian homes. Soldiers also uncovered a tunnel dug inside Gaza that led 300 meters into Israel, he said. International aid groups, however, say Israel is not doing enough to protect Palestinian civilians as well as aid workers. Tens of thousands of people have been displaced and many basic food items are no longer available, the office of the UN Humanitarian Coordinator said. The war in Gaza “is a present the Israelis gave to the fundamentalists... It will reinforce extremists, fundamentalists, all over Arab countries and even inside Israel,” former UN Secretary General Boutros-Ghali told journalists in Cairo. “It will weaken all moderates, all those who are in favour of a dialogue,” said Boutros-Ghali, who headed the UN from 1992 to 1997. He said that extremism will also gain political ground, pointing to Israel's failed war against Lebanon's Hezbollah in 2006 which is now “becoming one of the most important political parties in Beirut.” - Agencies Boutros-Ghali, who as state minister for foreign affairs was involved in negotiating Egypt's peace treaty with Israel, said it will now be “10 times more difficult to obtain a peace treaty, like we did in 1979.”