Officials in Gaza say fighting will continue unless demands for lifting of blockade and prisoner release are met

Hamas officials in Gaza have threatened a "major escalation" of rocket strikes against Israel, raising fears of a return to the intense violence of recent weeks.

Ihab al-Ghussein, the Islamist organisation's deputy information minister, said that "if on [Sunday] we have no response to our demands, our defensive measures will be intensified".

Sporadic rocket fire from Gaza into Israel continued on Saturday, along with air strikes by the Israeli military. Nine people were reported to have been killed in Gaza, including three when a mosque in the town of Nuseirat was destroyed at 3am. Twenty more have been injured, health workers in Gaza said. Israeli officials had telephoned inhabitants of homes around the mosque to tell them to evacuate, but men were thought to have been preparing for dawn prayers in its basement when the strike occurred, witnesses said.

No Israeli casualties were reported on Saturday. Two Israelis had been hurt by a mortar attack the day before.

Hamas refused to extend a three-day ceasefire that ended on Friday, saying a Palestinian negotiating team in Cairo had been offered nothing in return for peace. "These are negotiations under pressure. The Egyptians are not impartial mediators. We are in pain, but we have patience to suffer," Ghussein said.

Israel withdrew its negotiators from the indirect talks, saying that it would not negotiate while under fire.

Azzam Ahmed, head of the Palestinian delegation, said negotiators would leave Cairo unless Israel agreed to return to talks without setting conditions.

An estimated 1,900 Palestinians, mostly civilians, have died in the most deadly round of fighting between Israel and Hamas since the group seized control of Gaza in 2007, a year after winning a surprise victory in Palestinian elections. Three civilians in Israel have been killed and 64 soldiers.

The rockets being fired from Gaza have all been short-range. However, Hamas and other factions in Gaza have weapons that can reach Tel Aviv and Jerusalem, although most are intercepted by Israeli defence systems.

Israeli air strikes killed five Palestinians on Friday, among them a 10-year-old boy near a mosque in Gaza City.

The Palestinian negotiating team in Cairo, which includes members of all the main factions, has demanded the lifting of an eight-year-old Israeli-Egyptian blockade and the release of about 100 prisoners held by Israel. Israel insists that Hamas disarm; officials from the Palestinian group say this is "inconceivable".

Support for Hamas in Gaza still appeared to be strong. "Of course, people are supporting the resistance," said Marwan Saifan, 37, as he watched the rubble of the destroyed mosque in Nuseirat being cleared. "They are defending the people. They are fighting for our rights. Every house has lost a son, or a cousin, and that means more support for the resistance."

Most people in Gaza blamed Israel for the renewal of hostilities, and said they supported the demands made by the delegation in Cairo. The blockade of Gaza by Israel and Egypt has sent unemployment soaring and standards of living plunging in the overcrowded enclave. Almost a third of Gaza's 1.8 million residents have been displaced by the recent violence, and an estimated 65,000 people are now homeless. Gaza's infrastructure has been badly damaged.

Chris Gunness, spokesman for the UN agency for Palestinian refugees, said: "Huge swaths of Gaza have been levelled. We cannot rebuild it with our hands tied. The blockade must end."

More than 220,000 people are now staying in UN shelters. In one, a school in Beit Lahiya, about 1,000 people had to sleep outside because the 40 classrooms were full.

About 3,000 rockets have been fired from Gaza into Israel in recent weeks. An increase in the number of such attacks prompted Israel to launch air strikes almost a month ago. Last Friday 13 of 61 rockets fired at Israel fell within Gaza, the Israeli foreign ministry said.

Citing security concerns over continued rocket fire, Israeli police banned an antiwar protest in Tel Aviv, saying regulations prohibited large gatherings in areas at risk of attack.