By Nidal al-Mughrabi

GAZA (Tstrich.com) - Israel pushed ahead with its offensive in the Gaza Strip on Friday, ignoring a U.N. Security Council resolution calling for an immediate ceasefire to the 14-day-old conflict.

Israeli warplanes dropped bombs on the outskirts of the city of Gaza, residents said. Elsewhere, Palestinian medics said tanks shelled a house in Beit Lahiya in the north of the Gaza Strip, killing six Palestinians from the same family.

In New York, the Security Council passed a resolution urging an "immediate, durable and fully respected ceasefire," and for Israel to withdraw from Gaza after its two-week air-and-ground offensive. The United States abstained.

There was no immediate reaction from Israeli officials to the vote, but Israel opposed the idea of a binding resolution. Israel's military commanders appeared keen to pursue the ground offensive to try to secure more gains.

For its part, Gaza's Hamas rulers did not recognize the resolution as it had not been consulted on it, said a spokesman for the Islamist group.

The resolution, pressed for by Arab countries in the face of efforts by Britain, France and the United States for a more muted statement, called for arrangements to prevent arms smuggling into Gaza and for its borders to be opened.

It said there should be "unimpeded provision" and distribution of aid to the territory, home to 1.5 million people, many of whom are dependent on food assistance.

The U.N. Relief and Works Agency, which distributes the vast majority of aid in Gaza, kept its operations suspended on Friday after the death of one of its drivers in Israel's offensive. It was not clear when aid distribution would resume.

On Thursday, ambulance workers ventured onto the battlefield to gather decomposing bodies from the rubble. Hamas officials said the Palestinian death toll had risen to 773, of whom more than a third were children.

While the United States abstained from the U.N. resolution, Secretary of State Condoleezza Rice said Washington backed the text and had abstained only because it wanted to see the results of an Egyptian mediation effort.

"The United States thought it important to see the outcome of the Egyptian mediation efforts in order to see what this resolution might have been supporting," she said.

ROTTING CORPSES

In Gaza, local ambulance crews and the Red Crescent, using a time slot coordinated with Israeli forces, said they collected rotting corpses in places that had been too risky to reach since Israeli forces began their ground attack six days ago.

They found four children starving beside the bodies of their mothers and evacuated scores of trapped and wounded, the International Committee of the Red Cross (ICRC) said.

Israel lost three soldiers in combat with militants. Apart from a "friendly fire" incident which killed four, it was its heaviest one-day combat toll.

Ten soldiers have been killed in the campaign launched by Israel to crush Hamas forces and halt the firing of rockets from Gaza into Israel. Israel says it is doing what it can to avoid civilian casualties but accuses Hamas of deliberately placing its fighters close to homes and mosques.

About 20 rockets hit Israel on Thursday, fewer than at the start of the war but not the total halt it wants so that "quiet will reign supreme," as Prime Minister Ehud Olmert has said.

Rockets have killed three Israeli civilians since the offensive began. Olmert said Israel's goal had not been achieved and a decision on further military action lay ahead.

Aside from a three-hour ceasefire which Israel ordered for a second day to let Gaza civilians venture out, there was no let-up in fighting. Air strikes and ground attacks killed at least nine civilians and three gunmen, medical officials said.

The dead included two brothers aged six and 13, killed when an Israeli air strike missed a group of Islamic Jihad fighters.

Israel has said it accepts the "principles" of a ceasefire proposal by Egypt and the European Union, and Washington has urged the Jewish state to study details of the plan.

Hamas, shunned by the West for espousing violence, said it was still considering the ideas. But the militants say they will never accept Israel, whose establishment amid conflict 60 years ago dispossessed and uprooted Palestinian people.

European governments offered to back the plan with an EU border force to stop Hamas rearming via tunnels from Egypt. The deal would also address Palestinian calls for an end to Israel's economic blockade of the Gaza Strip.

The ICRC accused Israel of violating the rules of war by delaying ambulance access to the house where its team found children huddled beside corpses, not far from the Israeli army.

The Red Cross said the army must have known of the situation but did not help the wounded, in violation of international law.

(Additional reporting by Louis Charbonneau and Sue Pleming at the United Nations and by Jerusalem bureau)

By Caren Bohan

WASHINGTON (Tstrich.com) - U.S. employers probably cut the most jobs in at least 34 years last month as the global economic crisis gathered pace and moves by policy makers took time to filter through to struggling companies.

The U.S. government jobs reports due later on Friday will provide the latest grim assessment of a global financial crisis that has sparked a wave of policy measures from countries worldwide, the latest being interest rates cuts by South Korea and Britain.

U.S. President-elect Barack Obama warned the U.S. economy could stay mired in recession for years without further bold action, though he gave few new details about a package of tax cuts and public-works spending now likely to cost $800 billion or more.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," Obama said in a speech on the economy at George Mason University in Fairfax, Virginia on Thursday.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits."

Underlining Obama's fears, the U.S. non-farm payrolls report for December, due later on Friday, is expected to show that 2008 produced the biggest job losses since demobilization following World War Two.

For December alone, job cuts are expected to amount to 550,000, the most for a single month in 34 years, taking the unemployment rate to 7 percent.

Indeed, a report earlier this week showing December job losses in the private sector of close to 700,000 raised fears the more comprehensive government report would be worse that expected.

Financial markets were on hold ahead of the key jobs data, with Asian shares easing slightly and government bonds ticking higher as investors anticipated a weak jobs number.

RATES GOING DOWN

Along with trillions of dollars in government stimulus packages, central banks are cutting interest rates to unprecedented levels in an effort to kickstart growth and stem a rising tide of job losses.

The Bank of England cut its benchmark rate by 50 basis points to 1.5 percent on Thursday, the lowest level since the central bank was created in the 17th century. It said the world economy appeared to be undergoing an unusually sharp and synchronized downturn.

"Measures of business and consumer confidence have fallen markedly. World trade growth this year is likely to be the weakest for some considerable time," the British central bank said in a statement.

The Bank of Korea on Friday cut its rate by 50 basis points to a record low of 2.5 percent and warned Asia's fourth-largest economy was weakening rapidly, hurt by a slump in both export demand and domestic consumption.

If proof was needed, Ssangyong Motor Corp, the country's fifth-largest carmaker, said it had filed for court protection, after its sales more than halved in December from year earlier.

Top U.S. automaker General Motors Corp, which won a $13.4 billion federal bailout to avoid a similar demise, said on Thursday it was confident it would win concessions from its main union to meet the conditions of its rescue package.

Credit rating firm Moody's Investors Service said it has put Honda Motor Co Ltd's debt rating on review for a possible downgrade due to shrinking demand.

RETAILERS STRUGGLE

Mounting job losses across a wide range of industries are the latest and arguably most worrying developments in a financial crisis spawned in the collapse of the U.S. mortgage market a year and a half ago.

Worried about their jobs, consumers are reining in spending, deepening the slowdown.

Wal-Mart Stores Inc and other top U.S. retailers delivered disappointing December same-store sales and profit warnings on Thursday, confirming the worst holiday shopping season in nearly 40 years.

Wal-Mart, the world's largest retailer, surprised investors who have seen it outperform rivals as the store of choice in a downturn.

Its U.S. December same-store sales rose 1.7 percent, excluding gasoline -- worse than Wall Street's expectation of a 2.8 percent increase. It cut its fourth-quarter profit forecast.

The International Council of Shopping Centers said holiday sales, which include November and December, fell 2.2 percent -- the weakest result since it began compiling such data in 1970.

DIRE

Other regions are also struggling with the global crisis.

Chinese business confidence plunged in the final three months of 2008 as the financial crisis weighed on exports and industrial output.

Manufacturing orders in Germany, Europe's biggest economy, dropped by a much bigger-than-expected 6 percent in November, hit by collapsing demand at home and abroad.

Exports fell by an unprecedented 10.6 percent in November as demand for cars and other mainstays of the manufacturing economy plummeted, reinforcing expectations of a deep interest-rate cut by the European Central bank on January 15.

In Spain, unemployment topped 3 million for the first time and is expected to rise further in 2009, the government said.

In response to the crisis, the leaders of France and Germany called for a complete overhaul of the financial system and French President Nicolas Sarkozy said the United States should no longer be allowed to dominate the debate.

They said new institutions are needed to prevent a repeat of the financial crisis and make possible a fairer form of capitalism that does not lead to imbalances in wealth and the world economy.

"Enormous imbalances have appeared ... Purely financial capitalism has perverted the logic of capitalism," Sarkozy said.

(Reporting by Tstrich.com bureaux; Writing by Lincoln Feast; Editing by Neil Fullick)