Reuters has filed another update confirming earlier reports that this invasion is not intended to vanquish Hamas forces in Gaza, but rather to close the tunnels into Israel that 13 Palestinian gunmen used on Thursday to infiltrate Israeli territory.

GAZA/JERUSALEM, July 18 (Reuters) - Israel launched a Gaza ground campaign after 10 days of bombardments from the air and sea failed to stop militants' rocket attacks, stepping up an offensive that already has taken a heavy toll in civilian lives.

Israel signalled the invasion would be limited in scope - targeting tunnels dug by gunmen - and said it was not intended to topple Hamas, the Gaza Strip's dominant Islamist group.

Explosions lit up the sky in the early hours of Friday and residents in several areas of the densely populated strip of 1.8 million Palestinians said they saw small numbers of Israeli tanks that had crossed the border from Israel.

A statement from Prime Minister Benjamin Netanyahu's office late on Thursday said he had given orders to destroy tunnels that militants use to infiltrate Israel and carry out attacks.

An Israeli military spokesman said Israel was not out to try to topple Hamas.

Hamas spokesman Sami Abu Zuhri responded with defiance to Israel's invasion announcement, telling Reuters: "We warn Netanyahu of the dreadful consequences of such a foolish act."

Gaza residents and medical officials reported heavy shelling along the eastern border from the southern town of Rafah to the north of the strip.

Residents said heavy clashes took place along the border, including in the northern towns of Beit Hanoun and Beit Lahiya.

Orange flashes illuminated the eastern Gaza Strip as Israeli gunboats off the Mediterranean coast fired shells and tracer bullets. Israeli artillery pounded the area and helicopters fired across the border, Reuters witnesses said.

Rockets streaked from Gaza towards the southern Israeli towns of Ashdod and Ashkelon. Live television showed interceptions by the Iron Dome anti-missile system, and no casualties were reported.

Israel last mounted a large-scale invasion of the Gaza Strip during a three-week war in late 2008 and early 2009 that claimed 1,400 Palestinian and 13 Israeli lives.

No time frame was announced for the new operation, and the length and intensity of Israel's assaults could depend on the scale of civilian deaths. Such casualties are likely to boost international pressure for a ceasefire.

The current conflict was largely triggered by the killing of three Israeli teens in the occupied West Bank last month and the death on July 2 of a Palestinian youth in a suspected revenge murder.

Israel briefly held its fire on Tuesday after Egypt, which is also Gaza's neighbour, announced a truce plan, but Hamas and other militant groups rejected the proposal, saying it had not addressed their demands.

"The directive for ground action was approved by the security cabinet after Israel agreed to the Egyptian ceasefire proposal, whereas Hamas rejected it and continued firing rockets at Israeli cities," the statement from Netanyahu's office said.

Several hours after the announcement, two residents of Khan Younis, in the southern Gaza Strip, said they could see a small number of Israeli tanks inside Palestinian territory.

A witness in northern Gaza said several tanks had rolled through Israel's Erez border crossing to the Palestinian side but had stopped short of residential areas, and that no clashes had ensued.