It would be much more productive if Israel occupied Philadelphi road only and kept it closed until Hamas recognizes Israel's right to exist. Militarily it is less costly to keep only the Philadelphi road occupied, as this is relatively far from crowded areas and it would make it impossible to smuggle more rockets and weapons from tunnels.
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IDF fires tank shells toward Gaza in response to mortar fire (Haaretz)
from the article: LIVE BLOG: Day 3 of Israel-Gaza conflict 2012