GAZA CITY, Gaza Strip -- Israeli troops pressing ahead with a Gaza border town offensive killed seven Hamas militants and a girl Saturday as negotiators reported progress on forming a Palestinian government they hoped would thaw a freeze on international aid.

Palestinian President Mahmoud Abbas appealed for U.N. Security Council intervention to stop the Israeli military operation against rockets being fired from the town of Beit Hanoun, where violence since Wednesday has led to the deaths of more than 40 Palestinians.

Abbas "asks the members of the council to move quickly and discuss the tragic situation in the Palestinian territories caused by the Israeli aggression," his spokesman, Nabil Abu Rdeineh, said in a statement.

Despite the fighting, Palestinian negotiators said they were nearing agreement on forming a new government they hope will be acceptable to the West and end an international freeze on aid to the Palestinian Authority. The Hamas government of Prime Minister Ismail Haniyeh is shunned by the international community for refusing to recognize Israel and renounce violence.

Officials close to Abbas and Haniyeh said progress is being made on a Hamas proposal to set up a government of experts who have some ties to Hamas and Abbas' Fatah movement. As part of the agreement, the new prime minister would have Hamas ties, according to the officials.

The new government's program, the key sticking point in the past, would be intentionally vague, including on a possible recognition of Israel, the officials said. Hamas leaders are to make a decision Sunday on whether to present it as the official offer.

Negotiations have broken down repeatedly in the past and Ahmed Yousef, a key adviser to Haniyeh, said in London that the new government's guidelines would not include recognition of Israel, renunciation of violence or endorsement of past peace accords.

In ongoing violence, 44 Palestinians have been killed since Wednesday during the military campaign in the town of Beit Hanoun, on Gaza's border with Israel. More than 200 people have been wounded in the sweep so far, Palestinian health officials said. One Israeli soldier has been killed in the fighting and one seriously wounded.

The army says the town was targeted as a major launching ground for rockets on Israeli communities nearby.

The European Union on Saturday urged Israel and Palestinians to halt the violence, and the Interim Arab Parliament denounced the "daily Israeli attacks and repeated massacres against the Palestinian people in the Gaza Strip."

Since taking over Beit Hanoun, troops have conducted house-to-house searches, sometimes breaking through inner walls, posted snipers on roofs and rounded up hundreds of men for questioning, releasing most of them later. Since nightfall Friday, aircraft have struck a dozen times, targeting militants laying explosives or preparing rockets.

In Saturday's Gaza violence, Israeli aircraft killed a Hamas rocket maker in a missile strike on his minivan and ground forces blew up a weapons storehouse. Six Hamas gunmen were killed in separate incidents and a civilian died when his house, apparently weakened by the shock of explosions, collapsed on him, according to Palestinian reports.

In another incident, a 12-year-old girl was shot in the head and killed by an Israeli sniper, Palestinian officials said. The Israeli military expressed regret, saying the sniper was aiming at an armed militant and hit the girl by mistake.

Hamas gunmen attacked a building used by Israeli forces, detonating explosives and firing rockets, said Abu Obeida, a spokesman for Hamas militants. Witnesses said they saw two Israelis evacuated by helicopter.

The deputy head of Beit Hanoun's town council, Tisyan Hamad, said the destruction in the latest sweep is worse than anything the town has suffered in past Israeli operations.

"There's no electricity ... the people have no water, no food, telephone lines are cut, the infrastructure is damaged," he said.

The Israeli military said it has officers working with Palestinian officials to maintain deliveries of food and medical supplies, repair damaged power lines and help evacuate the Palestinian wounded.

Iyad Nasser, a spokesman for the International Committee of the Red Cross, said he reached Beit Hanoun on Friday evening, to deliver supplies to the local hospital. "People stood at the doors (of their homes) and shouted they need water and food," he said.

In Gaza, a spokesman for the small but violent Popular Resistance Committees said the Israeli operation jeopardized prospects for the safe release of Gilad Shalit, a young Israeli soldier captured by Hamas-allied militants in June.

A spokesman for the group, using the alias Abu Abir, also said Israel would face a wave of suicide bombings if the offensive was not halted within two days.