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Clashes between Israel Defense Forces troops and Palestinian gunmen resumed in Gaza City on Wednesday afternoon, after the expiration of a three-hour truce to allow in humanitarian aid, residents said.

Residents of the northern Gaza Strip had reported exchanges of fire between Israeli soldiers and Hamas militants during the 1 P.M. -4 P.M. temporary truce period.

In Gaza City, hundreds had taken to the streets during the hiatus, shopping and visiting relatives.

Israel plans to halt military operations for three hours a day near Gaza City to enable aid to flow through a humanitarian corridor it is setting up in the Hamas-ruled territory, a military source said on Wednesday.

"The idea is for the Israeli military to lay down its weapons every day from 1 P.M. to 4 P.M., starting today, in the area of the city of Gaza," the source said earlier in the day.

Palestinian officials said they had been informed of the plan.

Prime Minister Ehud Olmert's office said on Wednesday that Israel would set up the corridorto counter a crisis caused by its offensive against Hamas.

The PM's office said the measure was proposed by Israel Defense Forces leaders and would entail granting periodic access to various areas of the strips to allow Palestinians to stock up on vital goods.

During the lull, Israel allowed in 80 trucks of supplies as well as industrial fuel for Gaza's power plant.

Medics tried to retrieve bodies in areas that had previously been too dangerous to approach. The wail of ambulance sirens could be heard as drivers rushed to the border crossing with Egypt to evacuate the wounded during relative drop in violence.

Israeli forces battle militants across territory

Israeli ground forces battled with Palestinian gunmen throughout Gaza early Wednesday, as the army pressed on with its offensive against the coastal strip's Hamas rulers.

The Israel Defense Forces used infantry, tanks, combat engineers, artillery, and intelligence units against the Palestinian militant group, on the twelfth day of Operation Cast Lead.

Sounds of heavy gunfire and thick plumes of smoke engulfed the Zeitoun neighborhood east of Gaza City early Wednesday.

The Israel Air Force and Israel Navy assisted in the operation, with the IAF attacking about 40 targets in Gaza overnight, including 15 arms smuggling tunnels and Hamas weapons caches, the army said.

One morning air-strike killed four people, Gaza officials said. Their identity was unclear.

On the ground, five brigade-level contingents of Israeli forces searched for rocket launching sites and bunkers used by Gaza militants. Two IDF soldiers were lightly wounded during the operation.

Meanwhile, Israel's political leadership met in Tel Aviv on Wednesday morning to discuss expanding the ground offensive in Gaza at a time when most of the aims of the operation have been met.

On Tuesday, an Israeli soldier was killed and four were lightly wounded on Tuesday in clashes with Hamas in northern Gaza City. The soldiers reported casualties among the Hamas gunmen as well.

Staff Sgt. Alexander Mashvitski, 21 from Be'er Sheva, was part of a combat Engineering Corps unit that was removing explosives placed by Hamas. He was killed by Hamas gunmen during an operation with the Golani infantry brigade.

The IDF has strengthened its control over positions around Gaza City. The fiercest battles are currently in eastern Gaza City, on the outskirts of Sajaiyeh and the Jabalya refugee camps, and in the northern part of the Strip.