Palestinian Khaled Tafesh cries outside the morgue of Shifa Hospital before taking the dead body of his 10-month-old infant in Gaza City, Friday, Nov. 16, 2012. According to hospital reports, Haneen Tafesh died from wounds of an earlier Israeli strike. (AP Photo/Bernat Armangue)

Israeli security forces search for a rocket thought to have been fired by Palestinian militants from the Gaza Strip, in Jerusalem, Friday, Nov. 16, 2012. Hamas rocket squads targeted Israel's self-declared capital Jerusalem for the first time Friday, along with commercial hub Tel Aviv, showing off their expanded reach with what they said are Gaza-made projectiles being fired for the first time. (AP Photo/Sebastian Scheiner)

GAZA CITY, Gaza Strip (AP) — Hamas rocket squads aimed at Jerusalem for the first time Friday, along with commercial hub Tel Aviv, showing off their expanded reach as Israeli airstrikes pounded the Palestinian territory for a third day. Israel called up 16,000 reservists, moving a step closer to a possible ground offensive in the Palestinian territory.

Air raid sirens sounded in the two cities which — unlike population centers in Israel's south — had not been exposed to rocket fire from Hamas-ruled Gaza before the current round of cross-border fighting. No injuries were reported, but Hamas' latest attempts to hit Israel's heartland could push Israel closer to sending ground troops into Gaza.

Over the past three days, Israel has relentlessly pounded suspected rocket launching sites and other Hamas targets in Gaza with scores of airstrikes, while Hamas has fired more than 450 rockets toward Israel. The overall death toll rose to 30 — 27 Palestinians and three Israelis.

The Islamic militant group was badly bruised during its last full-fledged confrontation with Israel four years ago that ended with an informal truce, although rocket fire and Israeli airstrikes on militant operations continued sporadically. The Islamic militant group appeared better prepared this time with a more powerful arsenal.

Just a few years ago, Palestinian rockets were limited to crude, homemade devices manufactured in Gaza. But in recent years, Hamas and other armed groups have smuggled in sophisticated, longer-range rockets from Iran and Libya, which has been flush with weapons since Moammar Gadhafi was ousted last year.

Most of the rockets do not have guided systems, limiting their accuracy, though Israeli officials believe the militants may have a small number of guided missiles that have not yet been deployed.

Hamas said the two rockets aimed at the two Israeli cities Friday were made in Gaza, a prototype the militants call M-75, and have a range of about 80 kilometers (50 miles).

The air raid sirens sounded in Jerusalem after the start of the Jewish Sabbath in the holy city, claimed by both Israel and the Palestinians as a capital and located about 75 kilometers (47 miles) from Gaza. Israeli police spokesman Micky Rosenfeld said the rocket landed in an open area southeast of the city.

Earlier Friday, Gaza militants fired toward Tel Aviv and an explosion was heard in the city, but no injuries were reported. Hamas had first targeted Tel Aviv on Thursday, an unprecedented achievement for the group.

"We are sending a short and simple message: There is no security for any Zionist on any single inch ofPalestine and we plan more surprises," Abu Obeida, spokesman for the Hamas militant wing, said of the rockets aimed at Israel's two main cities.

A senior Hamas official said that Egypt, which often mediates between Hamas and Israel, was working behind the scenes to arrange a truce.

The official, speaking on condition of anonymity because he was discussing a sensitive diplomatic matter, said Hamas was demanding an end to the offensive, limits on Israeli ground activities along the border, a permanent halt in assassinations of Hamas leaders and an end to Israel's blockade ofGaza.

"These conditions must be honored and sponsored by a third party," he said. "We will stop all armed activities out of Gaza in return."

Israel is unlikely to accept some of the demands, particularly a permanent halt to military operations against Hamas.

An Israeli official refused to say whether Egypt or any other country was involved in cease-fire efforts but said Israel would not settle for anything less than a complete and longstanding halt to the rocket fire. "We're not interested in a timeout that returns us to square one," he said, speaking on condition of anonymity because he was not allowed to discuss the matter with the press.

Hamas' political rival in the West Bank, Palestinian President Mahmoud Abbas, said in a televised speech Friday that he has urged the U.S. and European countries to pressure Israel to halt the offensive. Abbas also called for Palestinian unity.

Hamas wrested Gaza from Abbas in 2007, deepening a split the two sides have been unable to overcome.

Despite the Gaza fighting, Abbas said he was determined to seek U.N. recognition of a Palestinian state in the West Bank, Gaza and east Jerusalem on Nov. 29. Such recognition of Palestine as a non-member observer state would be a largely symbolic step, but Israel and the U.S. oppose the idea, saying it's an attempt to bypass negotiations.

In Israel, military spokeswoman Lt. Col. Avital Leibovich said no decision has been made yet on a ground offensive but all options are on the table. Dozens of armored vehicles have been moved to Israel's border with Gaza since fighting intensified Wednesday, following Israel's assassination of the Hamas military chief.

She said 16,000 reserve soldiers were called up Friday, and the army could draft an additional 14,000 soldiers. She did not say where the reservists were being deployed.

Defense Minister Ehud Barak asked the Cabinet at a special meeting Friday night for authorization to activate additional soldiers.

The violence has widened the instability gripping the region, straining already frayed Israel-Egypt relations. The Islamist government in Cairo, like Hamas linked to the region-wide Muslim Brotherhood, recalled its ambassador in protest and dispatched Prime Minister Hesham Kandil to show solidarity with Gaza.

Kandil called for an end to the offensive while touring Gaza City's Shifa Hospital with Ismail Haniyeh, the Gaza prime minister who was making his first public appearance since the fighting began.

In one chaotic moment, a man rushed toward the two leaders, shouting as he held up the body of a 4-year-old boy. The two prime ministers cradled the lifeless boy who Hamas said was killed in an Israeli airstrike — a claim Israel denied.

Fighting to hold back tears, Kandil told reporters that the Israeli operation must end.

"What I saw today in the hospital, the wounded and the martyrs, the boy ... whose blood is still on my hands and clothes, is something that we cannot keep silent about," he said.

Israel said it halted its incessant air attacks on militant targets in Gaza during Kandil's visit, though Hamas security claimed three airstrikes hit the territory during that period.

Militants, meanwhile, fired off more than 60 rockets after Kandil arrived in Gaza. The pace of cross-border fighting quickly resumed after the Egyptian leader's departure.

In Egypt's two largest cities, Cairo and Alexandria, thousands protested the Israeli offensive Friday in marches organized by Egyptian President Mohammed Morsi's Muslim Brotherhood. Protesters waved Palestinian flags and chanted slogans against Israel. In Cairo's Tahrir Square, a few hundred protesters burned an Israeli flag.

Prominent Brotherhood figures took part, many brandishing the checkered Palestinian scarf, or keffiyeh, during the marches.

Small anti-Israeli demonstrations occurred in east Jerusalem and the West Bank. Police dispersed the crowds with tear gas and stun grenades. And in Iran, a close Hamas ally, thousands of people took to the streets in the capital Tehran. The demonstrators carried banners denouncing Israel. They chanted "Death to the U.S." and "Death to Israel."

In Europe, reaction was mixed. Germany held Hamas responsible and urged Egypt to pressure the Islamists to halt the violence, while Britain cautioned Israel against launching a ground offensive.

"When Israel has entered into ground invasions in other conflicts that is when they have lost a good deal of international sympathy and support, and of course civilian casualties become much harder to avoid in that situation," Foreign Minister William Hague told reporters in London.

U.N. chief Ban Ki-moon announced plans to visit the Mideast region soon in a bid to reduce tensions, but his spokesman Martin Nesirky refused to discuss specific sites, countries or dates for the visit.

Israeli Prime Minister Benjamin Netanyahu appeared determined to move forward. "The Israeli military "continues to strike hard against Hamas and is prepared to expand its action into Gaza," he said.

At least 27 Palestinians, including 14 militants and six children, as well as three Israelis have been killed in the fighting — a relatively low toll compared to the beginning of Israel's previous major offensive against Hamas four years ago. Netanyahu has said the air force is trying to strike surgically and avoid harm to civilians.

The 4-year-old boy whose body had been handed to Kandil and Haniyeh was killed along with a young man earlier Friday when an Israeli missile struck close to their homes in the town of Jebaliya near Gaza City, relatives said.

The area near the boy's home showed signs that a projectile had exploded there, with shrapnel marks in the walls of surrounding homes and shattered kitchen windows. But neighbors said security officials quickly took what remained of the projectile, making it impossible to verify who fired it.

Kandil's visit came after a night of fierce exchanges, with dozens of rocket barrages setting off sirens throughout southern Israel, an area with a population of about 1 million.

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Federman reported from Jerusalem. Associated Press writer Ibrahim Barzak in Gaza City contributed to this report.

We were told to expect news of increasingly wider investigations of banks and other financial institutions with revelations that would shock us. The revelations continue.

HSBC Investigation: clients of Britain’s biggest bank exposed

By Holly Watt, Robert Winnett and Claire Newell, The Telegraph, 15 Nov 2012

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9665741/HSBC-Investigation-clients-of-Britains-biggest-bank-exposed.html

Britain’s biggest bank is at the centre of a major HM Revenue and Customs investigation after it opened offshore accounts in Jersey for serious criminals living in this country, The Telegraph can disclose.

The tax authorities have obtained details of every British client of HSBC in Jersey after a whistleblower secretly provided a detailed list of names, addresses and account balances earlier this week.

The Telegraph understands that among those identified on the list are Daniel Bayes, a drug dealer who is now in Venezuela; Michael Lee, who was convicted of possessing more than 300 weapons at his house in Devon; three bankers facing major fraud allegations and a man once dubbed London’s “number two computer crook”. A series of other accounts containing six-figure deposits are also registered to modest addresses in relatively poor parts of the country.

The disclosures raise serious questions about HSBC’s procedures in Jersey, with the bank already preparing to pay fines of around $1.5 billion in America for breaking money laundering rules.

The bank is legally obliged to report to the authorities any suspicions about the source of money deposited in its accounts.

HM Revenue and Customs is now understood to be trawling through a list of the names and addresses of more than 4,000 people based in Britain who had bank accounts at HSBC in Jersey.

This work is expected to lead to the identification of hundreds of people who are evading tax as the accounts have not been previously disclosed.

Last night, a spokesman for HMRC said: “We can confirm we have received the data and we are studying it. We receive information from a very wide range of sources which we use to ensure the tax rules are being respected.

“Clamping down on those who try to cheat the system through evading taxes and over claiming benefits is a top priority for us and we value the information we receive from the public and business community.”

The Telegraph has established from public records that HSBC has opened bank accounts in Jersey for several people who are wanted by the police or have serious criminal convictions.

The information obtained by HMRC is thought to be the biggest data leak identifying holders of offshore accounts ever obtained by the British tax authorities.

The list identifies 4,388 people holding £699 million in offshore current accounts and they are also likely to have billions of pounds more in investment schemes. Several celebrities and other well-known figures are understood to be identified in the client data.

Tax authorities around the world are involved in an increasingly aggressive race to obtain details of their citizens with offshore bank accounts, many of which are suspected to be linked to tax evasion or other criminal activity. An insider at HSBC in Switzerland has already sold details of the bank’s clients in Geneva to tax authorities in 2008. This led to the creation of the so-called “Lagarde list”, named after the then French finance minister, with about 2,000 Britons identified. Last week, a Greek journalist was threatened with prosecution after disclosing details of Greek account holders on the Lagarde list.

The leak of the Jersey data, which is understood not to have involved HMRC paying for the list, is expected to have global ramifications as more than 4,000 residents of other countries are identified, although British residents account for more than half of all the clients.

The HSBC Jersey client list is understood to be heavily dominated by senior figures in the City. Dozens of bankers are understood to have deposited six-figure sums offshore with some institutions said to have “clusters” of employees taking advantage of the accounts.

Doctors, mining and oil executives and oil workers are also heavily represented in the list. More unexpectedly, a greengrocer in the East End is understood to have more than £80,000 in his HSBC current account in Jersey.

Although some of the individuals may have declared the offshore holdings, HMRC is currently understood to be comparing the new documents with tax records to identify anomalies.

One investment manager has more than £6 million in his account, while the average amount held is £337,000. Under Britain’s non-domicile rules, those with foreign roots only have to pay tax on money entering Britain – provided it is earned abroad. However, more seriously for HSBC, dozens of people with no obvious legal source of substantial income are holding large sums in Jersey.

Daniel Bayes was branded “monstrous” for refusing to return from Venezuela after £500,000 of cannabis was found growing at his farm in 2006.

His father was jailed for three years in his absence. Mr Bayes is understood to have deposited £250,000 in an offshore account, although police said they would still like to question him.

A couple who live in a small house in Teignmouth, Devon, deposited £85,000 in an offshore account. More than 300 firearms, including Israeli Uzi submachine guns and pump-action shotguns, were found in their house after a police raid in 2001. Michael Lee was jailed for two years in 2002.

Around the world, HSBC has faced repeated accusations that it was not maintaining sufficient controls over the source of money deposited in its accounts. Money laundering rules demand that banks monitor the source of money and report any suspicions to the relevant authorities. Most banks take an active approach to this duty.

In July, a US Senate investigation found that money-laundering controls were largely absent in HSBC’s operations in Mexico. The bank has also faced serious criticism for hiding Iranian transactions.

One analyst called HSBC’s practices “a wink/nod business model” that showed “a profound lack of controls”.

Stuart Gulliver, the chief executive of HSBC, previously admitted: “We failed to spot and deal with unacceptable behaviour.” He insisted the bank would begin to operate at “a single standard globally that is determined by the highest standard we must apply anywhere”.

A spokesman for the bank said last night: “HSBC has a duty of confidentiality and cannot comment on clients even to confirm or deny they are clients. We have good relationships with our regulators and co-operate with investigations when required to do so.”

Whistle-blowers helping authorities chase tax evaders

TAX authorities around the world are involved in an increasingly aggressive and often clandestine race to gain information on the identities of those with offshore bank accounts.

HM Revenue and Customs (HMRC) has paid hundreds of thousands of pounds to whistle-blowers in return for information about offshore account holders. German authorities reportedly paid €2.5 million (£1.9 million) to an unnamed individual for a CD containing details of HSBC clients in Switzerland in 2010.

The data contained information that led prosecutors to believe that more than £1 billion of undeclared income had been deposited by 1,100 wealthy Germans.

Last week, a Greek magazine published a list of HSBC’s Swiss bank account holders. It is known as the “Lagarde List”, because the then French finance minister Christine Lagarde — now the International Monetary Fund director — handed it to Greek authorities in 2010.

HMRC also received details of British residents from this list and has investigated 500 of those identified.

HMRC is understood not to have paid for information about HSBC’s Jersey clients but the data it has received is thought to be the single biggest disclosure of a bank’s offshore customers.

The Daily Telegraph understands that the whistleblower who has obtained the information also has further lists of offshore HSBC clients with addresses outside Britain, including 602 in Israel, 527 in France, 333 in Spain and 117 in the US. In total, the leaked HSBC Jersey client list is thought to contain the names and addresses of 8,474 people. More than half are based in this country.

The use of tax havens by British residents and citizens to minimise tax is legal but subject to a range of complex rules and regulations. British taxpayers have a duty to report to HMRC details of money held offshore that is liable to tax.

Palestinian firefighters work at the scene of an Israeli air strike on a building in the Jebaliya refugee camp in the northern Gaza Strip, Saturday, Nov. 17, 2012. Israel bombarded the Hamas-ruled Gaza Strip with more than 180 airstrikes early Saturday, widening a blistering assault on militant operations to include government and police compounds, militant leaders’ residences and a vast network of smuggling tunnels. (AP Photo/Hatem Moussa)

A Palestinian man walks among debris after an Israeli airstrike at Hamas Prime Minister Ismail Haniyeh's office, right, in Gaza City, Saturday, Nov. 17, 2012. Israel bombarded the Hamas-ruled Gaza Strip with more than 180 airstrikes early Saturday, widening a blistering assault on militant operations to target government and police compounds and a vast network of smuggling tunnels. (AP Photo/Bernat Armangue)

GAZA CITY, Gaza Strip (AP) — Israel bombarded the Hamas-ruled Gaza Strip with more than 180 airstrikes early Saturday, the military said, widening a blistering assault on militant operations to include the prime minister's headquarters, a police compound and a vast network of smuggling tunnels.

The new attacks followed an unprecedented rocket strike aimed at the contested holy city of Jerusalem that raised the stakes in Israel's violent confrontation with Palestinian militants.

Israeli aircraft also kept pounding their original targets, the militants' weapons storage facilities and underground rocket launching sites. The Israeli military called up thousands of reservists and massed troops, tanks and armored vehicles along the border with Hamas-ruled Gaza, signaling a ground invasion could be imminent.

Militants, undaunted by the heavy damage the Israeli attacks have inflicted, have unleashed some 500 rockets against the Jewish state, including new, longer-range weapons turned for the first time this week against Jerusalem and Israel's Tel Aviv heartland.

Six people, including five militants, were killed and dozens were wounded in the various attacks Saturday, Gaza health official Ashraf al-Kidra said. In all, 35 Palestinians, including 13 civilians, and three Israeli civilians have been killed since the Israeli operation began.

Israel had been slowly expanding its operation beyond military targets but before dawn on Saturday it ramped that up dramatically, hitting Hamas symbols of power. A three-story apartment building belonging to a Hamas military commander was hit, and ambulances ferried out more than 30 inhabitants wounded by the powerful explosion.

Missiles smashed into two small security facilities as well as the massive Hamas police headquarters in Gaza City, setting off a huge blaze that engulfed nearby houses and civilian cars parked outside, the Interior Ministry reported. No one was inside the buildings.

The Interior Ministry said a government compound was also hit while devout Muslims streamed to the area for early morning prayers, although it did not report any casualties from that attack. Also hit was a Cabinet building where the Hamas prime minister has his offices. Prime Minister Ismail Haniyeh was not inside.

Missiles knocked out five electricity transformers, plunging more than 400,000 people in southern Gaza into darkness, according to the Gaza electricity distribution company.

In southern Gaza, Israeli aircraft went after the hundreds of underground tunnels militants used to smuggle in weapons and other contraband from Egypt, residents reported. A huge explosion in the area sent buildings shuddering in the Egyptian city of El-Arish, 30 miles (45 kilometers) away, an Associated Press correspondent there reported. The tunnels have also been a lifeline for residents of the area during the recent fighting, providing a conduit for food, fuel and other goods after supplies stopped coming in from Israel before the military operation began.

The Israeli military did not provide a detailed accounting of its overnight targets, but said more than 180 sites were struck, for a total of more than 800 since the operation began.

The widened scope of targets brings the scale of fighting closer to that of the war the two groups waged four years ago. Hamas, a group that remains pledged to Israel's destruction, was badly bruised during that confrontation, but has since restocked its arsenal with more and better weapons, and has been under pressure from smaller, more militant groups to prove its commitment to fighting Israel.

The attack aimed at Jerusalem on Friday and two strikes on metropolitan Tel Aviv showcased the militants' new capabilities, including a locally made rocket that appears to have taken Israeli defense officials by surprise. Both areas had remained outside the gunmen's reach before.

Just a few years ago, Palestinian rockets were limited to crude devices manufactured in Gaza. But in recent years, Israeli officials say, Hamas and other armed groups have smuggled in sophisticated, longer-range rockets from Iran and Libya.

The eerie wail of air raid sirens sounded in Jerusalem after the start of the Jewish Sabbath in the holy city, claimed by both Israel and the Palestinians as a capital. Residents were shocked to find themselves suddenly threatened by rocket fire, which, for more than a decade, had been restricted to steadily broadening sections of southern Israel.

The attack was audacious, both for its symbolism and its reach. Located 80 kilometers (50 miles) from the Gaza border, Jerusalem had been considered beyond the range of Gaza's imprecise rockets — and an unlikely target because it is home to the Al-Aqsa Mosque compound, Islam's third-holiest shrine.

Israeli police spokesman Micky Rosenfeld said the rocket landed in an open area outside the city — near the Palestinian city of Bethlehem and just a few miles from Al-Aqsa.

"We are sending a short and simple message: There is no security for any Zionist on any single inch ofPalestine and we plan more surprises," said Abu Obeida, a spokesman for Hamas' armed wing.

Israeli leaders have threatened to widen the operation if the rocket fire doesn't halt. Foreign Minister Avigdor Lieberman said options included the possible assassination of Haniyeh, the prime minister.

Israeli Prime Minister Benjamin Netanyahu met in emergency session with Cabinet ministers Friday. Israeli media reported they approved drafting 75,000 reservists. Earlier this week, the government approved a separate call-up of 30,000.

Lt. Col. Avital Leibovich, a military spokeswoman, said 16,000 reservists were called to duty on Friday and others could soon follow.

She said no decision had been made on a ground offensive but all options are on the table.

President Barack Obama spoke separately to Israeli and Egyptian leaders Friday as the violence in Gaza intensified. In a conversation with Israeli Prime Minister Benjamin Netanyahu, he reiterated U.S. support for Israel's right to self-defense. To Egyptian President Mohammed Morsi, he praised Egypt's efforts to ease regional tensions.

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Associated Press writer Matthew Daly reported from Washington. Teibel reported from Jerusalem.