RAFAH, May 17: Panicked Palestinians left their homes on Monday as Israeli forces surrounded a Gaza refugee camp after threatening to carry out a mass demolition in a militant hotbed despite an international outcry.

Palestinian Prime Minister Ahmed Qurie pleaded for US intervention in rare talks with a top White House policymaker but received little more than expressions of concern.

Shaken by ambushes that killed 13 Israeli soldiers in Gaza, the Middle East's strongest army said it planned first to hit militants and then raze hundreds of houses it says serve as gun nests and possibly dig a moat to block arms-smuggling tunnels.

The plan has drawn UN and European Union condemnation as it could uproot thousands of Palestinians and result in the destruction of hundreds of homes near Gaza's border with Egypt.

As Israeli armour cordoned off southern Gaza's Rafah refugee camp, Palestinian militants there prepared for battle. Militants prepared ambushes for Israeli troops and factions set up a joint command to coordinate fighting.

"We either fight united and achieve victory or fight as individuals and lose," militants said in a statement. Hundreds of frightened Rafah residents piled bedding, furniture, clothes, floor tiles and other items on donkey carts and rickety old trucks and moved out.

The U.N. Relief and Works Agency for Palestine Refugees (UNRWA) readied four schools with stockpiled food and water and set up rows of tents to take in 1,500 displaced to start.

"There is no place for me to go. I don't think I will return," said Youssef al-Jamal, 33, removing possessions from his home in the bullet-pocked, cinderblock camp of 90,000 people. -Reuters