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GAZA CITY (CNN) -- Israeli jets pounded Hamas targets in Gaza and Hamas militants launched more rockets into Israel, as Palestinian security sources said Sunday that at least 277 people had been killed and hundreds wounded.

Israel will call up 7,000 reserve soldiers, Defense Minister Ehud Barak said during the weekly Cabinet meeting. He told ministers he planned to present the measure to two Knesset committees, which must approve the action.

Meanwhile, Israeli ground troops and tanks were deployed around Gaza. There is no indication of a ground operation inside Gaza, but a senior military official said the air raids would continue and that troops around Gaza will "be activated if needed."

The U.N. called for a halt to hostilities, but Israeli Prime Minister Ehud Olmert said at the Cabinet meeting that the operation "is liable to continue for some time, perhaps more than can be foreseen at the present time."

Hamas, too, showed no signs of backing down.

For a second day, black plumes of smoke rose above Gaza City as makeshift ambulances screamed down rubble-strewn streets, taking wounded Palestinians to hospitals already crowded with hundreds of patients injured this weekend. Watch parts of Gaza reduced to shambles »

Terrified people huddled in their basements for safety, with few venturing outside, said Dr. Eyad El-Sarraj, a psychiatrist who runs Gaza's mental health program.

"The children are terrified," El-Sarraj said. "Adults are unable to provide them with security or warmth. Hospitals are stretched out of the limits. We need blood and medicine and surgical equipment."

He further warned that Gaza is heading for "a major humanitarian disaster" unless the fighting ends.

srael has said the airstrikes are a necessary self-defense measure after repeated rocket attacks from Gaza into southern Israel by Hamas militants. Watch an ambassador say Israel is only defending itself »

The U.N. Security Council ended a four-hour emergency meeting Sunday with a call for an immediate halt to hostilities and a re-opening of border crossings to allow humanitarian supplies to reach Gaza.

The Palestinians' U.N. envoy said if Israel does not halt attacks within 48 hours, Arab delegations will demand stronger action from the Security Council.

Israel gave in to requests from the Red Cross and others to allow 16 trucks loaded with fuel, food and medical supplies into Gaza through the Kerem Shalom crossing Sunday morning. Egypt sent 20 ambulances to its border with Gaza, an Egyptian official said.

The Red Cross and World Food Program trucks, which carried rice, wheat and medical supplies, were the first deliveries allowed by Israel since 80 trucks moved through Friday after Israel opened three border crossings.

More than 110 Hamas rockets have been launched into Israel by Hamas militants since Saturday morning, an Israel Defense Forces spokesman said. An Israeli man died when a rocket slammed into a home Saturday, IDF said.

An Israeli police spokesman said that one rocket landed north of Ashkelon, which sits about 6 miles (10 kilometers) north of the Gaza border. The city has been a frequent target of missiles launched from Gaza.

Gaza City's main police station and jail were hit by Israeli missiles Sunday morning, according to a Gaza-based journalist.

At least two people were killed when a missile struck the Seraya compound, which houses various Hamas military organizations in central Gaza City. Another two people were killed when an airstrike hit a vehicle.

Missiles also hit near the Beit Hanoun City Hall, according to a reporter there, and Palestinian sources said Israeli bombs fell on the Palestinian side of the Rafah tunnels on the Egyptian border with southern Gaza.

An Israeli army spokesman confirmed the airstrike. He said it targeted 40 tunnels on the border, which he said Hamas uses to smuggle weapons into Gaza.

Two tunnels were hit by missiles, eyewitnesses said, and others collapsed. Two people were killed.

Palestinians began trying to cross over into Egypt through a hole in the wall after the bombing, the witnesses said, but Egyptian police and Hamas gunmen began firing in an attempt to stop them.

More than 40 airstrikes were carried out Sunday, the Israeli army said. An IDF spokesman said Israel had struck 210 Hamas targets since Saturday morning.

Riyad Mansour, the Palestinian envoy to the U.N., said the casualty toll in the past day forced U.N. Security Council members to confront Israel to end the attacks. Watch Mansour condemn attacks »

The Security Council issued a brief press statement, which fell short of the resolution that the Palestinians requested.

The statement expressed "serious concern at the escalation of the situation in Gaza," but it did not single out Israel or Hamas when it called for "an immediate halt for all violence."

Israel's ambassador to the U.N., Gabriela Shalev, responded that her country was only defending itself from Hamas rocket attacks.

"The last days were so bad that we had to say, and did say, 'Enough is enough,' " Shalev said. "The only party to blame is the Hamas."

Hamas, however, vowed to retaliate, saying Israel had violated an Egyptian-brokered cease-fire intended to stem violence in the region.

"We will stand up, we will defend our own people, we will defend our land and we will not give up," senior spokesman Osama Hamdan said. Read reactions to Israel's strike on Gaza »

The U.S. ambassador to the U.N., Zalmay Khalilzad, supported Israel's contention that it was up to Hamas to stop the violence.

"Israel has the right to self-defense and nothing in this press statement should be read as anything but that," Khalilzad said.

The United States has cautioned Israel, however, to avoid civilian casualties. Israeli leaders maintain they are attempting to do so.

Anti-Israeli demonstrations erupted in the West Bank. One person was killed and three others injured in a demonstration in Niilin, a Palestinian official said. An Israeli military spokeswoman said hundreds of Palestinians threw rocks and then fired shots at Israeli forces that were attempting to disperse them.

The power base for Abbas' Fatah party is in the West Bank. The party is locked in a power struggle with Hamas, which won parliamentary elections in January 2006 and wrested Gaza from Fatah in violent clashes last year. Abbas, a U.S. ally, wields little influence in Gaza.

The cash-strapped masses may be spending less on restaurants and entertainment, but not necessarily on the quality of their sex lives--and manufacturers of sexual aids are broadening their lines to meet the demand.

To wit: Trojan now offers a condom that comes with a disposable vibrating ring. Durex, another condom maker, sells a vibrator and a line of lubricants. Even Philips Electronics (nyse: PHG - news - people ) has joined competitor Hitachi (nyse: HIT - news - people ) in the vibrator business. "We're much more open now to experimenting sexually," says Louis Friedman, chief executive of Liberator, a maker of sex toys in Atlanta. "We’re seeing countless new products being sold to a much larger audience than people realized. Even the more conservative retailers have begun to come around."

Indeed, Wal-Mart (nyse: WMT - news - people ), Walgreen (nyse: WAG - news - people ) and Target (nyse: TGT - news - people ) now peddle sexual aids, including condoms, lubricants and personal massagers. Walgreen's Web site features a "sexual wellness" tab, behind which are listed not only contraceptives and fertility tests, but also pleasure-enhancing dietary supplements, romance-themed costumes and games, massage oils and lotions, and the "Emotional Bliss Femblossom" vibrator. (Representatives from Walgreen's and Target were unavailable for comment; a Wal-Mart communications manager would say only that the chain "has a diverse mix of shoppers who visit our stores each day, and we are committed to providing customers with the selection of products they expect to find in our stores.")

In Pictures: The Mainstreaming of the Sex Industry

Poor as we all may feel lately, it seems there's at least one bright spot in having to hunker down at home. "This industry is shielded in a way," says Katy Zvolerin, director of public relations with Adam & Eve, another sex toy maker. "It does seem people use us even more heavily in bad times." (Not that there's much of a correlation between recessions and birth rates--if people have more sex during a recession, they are being careful about it.)

Chad Braverman, director of product development and licensing at Doc Johnson, takes a more sober approach to the coming months. "I don't know if I'd say our industry was 'recession-proof,'" he says. "We need to be proactive in creating a quality product that's going to sell. And there's a lot more competition than there was 20 years ago."

The sex industry traces back to 500 B.C., when traders from the Greek port of Miletus sold olisbos, an early version of the dildo. Today, the business of sex (including pornography) now runs into the tens of billions of dollars. (No official estimates are available; Wall Street analysts don't tend to track this stuff.) And while print and video sales are ebbing, as more free adult content has become available online, sales of un-reproducible sexual aids are still healthy.

CAIRO, Nov 29 (Reuters) - Saudi Arabia on Saturday cited $75 a barrel as a "fair price" for oil, the first time in years that the world's biggest exporter has identifed a target for crude prices.

Saudi Oil Minister Ali al-Naimi said oil prices needed to return to $75 to keep the more expensive new projects at the margins of world supply on track. His comments may come as a relief to consumer nations fearful of a return to $100-plus oil. U.S. crude <CLc1> was valued at $55 at the close of trade on Friday.

"There is a good logic for $75 a barrel," Saudi Oil Minister Ali al-Naimi, OPEC's most influential voice, told reporters in Cairo, where the producer cartel was meeting. [ID:nLT557953]

"You know why? Because I believe $75 is the price for the marginal producer. If the world needs supply from all sources, we need to protect the price for them. I think $75 is a fair price," he said.

Saudi King Abdullah announced $75 as a fair price in an interview with Kuwaiti newspaper Al-Seyassah.

Naimi's comments stopped far short of suggesting OPEC adopt a new formal price target to guide policy. But the unexpected break from his customary refusal to cite any sort of preferred price will give markets a new reference point when world oil demand recovers from the current recessionary slump.

The FBI and Department of Homeland Security issued a warning yesterday to state and local officials about "uncorroborated but plausible information" received in late September that al-Qaeda might have discussed targeting New York City transit systems, DHS and New York police spokespeople said.

Target reported a 3 percent drop in quarterly sales, partly because of defaults on its store credit card, and warned that its profit this quarter might be lower than expectations. (Photo: Bill O'Leary/The Washington Post)

Each day of financial tumult is bringing more pressure to bear on the nation's retailers -- and time is growing short.

Yesterday, as the clock ticked ominously down to the critical holiday season, department stores and clothing retailers reported a sharp drop in sales while Target said its shoppers are delinquent in their store credit card payments. Port traffic, meanwhile, has been plummeting as retailers cut back on inventory.

"I don't think anyone predicted a crisis of this magnitude that couldn't be fixed quickly," said Bob Carbonell, chief credit officer for Bernard Sands, a retail rating and credit services agency. "If the American housewife puts the money under the mattress, we're in deep trouble."

In a year that seems to be defying all economic expectations, retailers are struggling to plot a course through the make-or-break holiday season, which accounts for nearly 20 percent of their sales each year. Will they have access to credit? How much merchandise should they order? Will anyone buy it? The moves they make now could determine where they stand in January.

The past three months were expected to bring the deepest cuts in consumer spending since the 1991 recession. September's dire economic news -- from the collapse of Lehman Brothers to the freefall in the financial markets to the government's $700 billion rescue plan -- have spooked shoppers and eroded confidence. On the day that the House of Representatives rejected the rescue plan, mall traffic plunged 12 percent, according to research firm ShopperTrak.

Scott and Elaine Bourdeau feel the ripples. The couple, who live in Herndon, had planned to travel to Italy for their 10th anniversary but opted instead to save money with a short trip to the San Francisco Bay area. They're postponing remodeling their bathroom and focusing on necessities -- clothes for their two daughters.

As they shopped in Georgetown yesterday, Elaine Bourdeau said her husband had decided they need to cut back on Christmas. "I agreed," she said. "One gift per kid."

Early retail sales reports yesterday reflected similar decisions by shoppers across the country. The best performers were discount retailers, but even they ranked below Wall Street estimates. Wal-Mart reported same-store sales at its domestic stores and warehouse club division, Sam's Club, grew 2.8 percent in September compared with the same month last year. Costco grew 9 percent.

Department stores from Kohl's to Nordstrom saw a drop in sales at stores open at least a year, a key measure of a retailer's health known as same-store sales. Dillard's, JCPenney and Saks plummeted by double digits.

Those grim reports are dimming retailers' hopes for a recovery before sleigh bells jingle. Target reported a 3 percent drop in sales, partly because of the large number of defaults on its store credit card, and warned that its profit this quarter might be lower than expectations. Several other retailers lowered their performance outlooks. About two dozen more retailers are expected to release their figures today.

"Right now, the fear is high and the uncertainty is higher," said Gene Tyndall, executive vice president at Tompkins Associates, a supply chain consulting firm.

Domonique Blaine, 23, of the District said he has been spending more conservatively, checking out sales racks and forgoing designer labels. But he has been eyeing a $250 Banana Republic plaid trench coat. He put the jacket on hold.