JERUSALEM — Palestinian militants carried out the deadliest single attack on Israel's forces since the Hamas raid that triggered the war, killing 21 soldiers, the military said Tuesday, a significant setback that could add to mounting calls for a cease-fire.
Hours later, the military announced that ground forces had encircled the southern city of Khan Younis, Gaza's second largest. That marked a major advance, but it was unclear how much closer it would bring Israel to defeating Hamas or freeing Israeli hostages — two central war aims that have proved increasingly elusive — or what impact it would have on cease-fire talks that appear to be gathering pace.
Prime Minister Benjamin Netanyahu mourned the soldiers but vowed to press ahead with the offensive until “absolute victory” over Hamas. But Israelis are increasingly divided on whether such a victory is possible — and whether it is compatible with bringing back the hostages. In previous conflicts, large numbers of casualties have pressured Israel to halt military operations.
A senior Egyptian official said Israel has proposed a two-month cease-fire in which the hostages would be freed in exchange for the release of Palestinians imprisoned by Israel and top Hamas leaders in Gaza would be allowed to relocate to other countries.
The official, who was not authorized to brief media and spoke on condition of anonymity, said Hamas rejected the proposal and…