GAZA/JERUSALEM, Nov 20 (Reuters) - Egypt's president predicted on Tuesday that Israel's Gaza offensive would end later in the day, Egyptian state media said, as U.S. Secretary of State Hillary Clinton headed to the region to try to calm the conflict.

"President Mohamed Mursi announced that the farce of Israeli aggression against the Gaza Strip will end on Tuesday," the MENA news agency and state TV reported, quoting public remarks he made after the funeral of his sister.

Egypt, led by an Islamist government allied with Gaza's ruling Hamas movement and at peace with Israel, has been trying to broker a ceasefire in hostilities now in their seventh day.

MENA quoted Mursi as saying "the efforts to conclude a truce between the Palestinian and Israeli sides will produce positive results in the next few hours".

While efforts mounted to stop the fighting and avert a possible Israeli ground invasion of the densely populated Gaza Strip, Israel pressed on with air strikes and Palestinian rockets flashed across the border.

Jerusalem was targeted for the second time since Israel launched the air offensive with the declared aim of deterring Palestinian militants from carrying out cross-border attacks that have plagued its south for years.

The rocket, which fell harmlessly in the occupied West Bank, triggered warning sirens in the holy city about the time U.N. Secretary-General Ban Ki-moon arrived in Jerusalem from talks in Cairo, where he had held discussions on a truce.

Israel's military on Tuesday targeted about 100 sites in Gaza, including ammunition stores and the Gaza headquarters of the National Islamic Bank. Gaza's Hamas-run Health Ministry said six Palestinians were killed.

Israeli police said more than 150 rockets were fired from Gaza by late afternoon, many of them intercepted by Israel's Iron Dome system. Ten people were wounded in Israel, the military and an ambulance service said.

Some 115 Palestinians have died in a week of fighting, the majority of them civilians, including 27 children, hospital officials said. Three Israelis died last week when a rocket from Gaza struck their house.

Israel's leaders weighed the benefits and risks of sending tanks and infantry into the Gaza Strip two months before an Israeli election, and indicated they would prefer a diplomatic path backed by world powers, including U.S. President Barack Obama, the European Union and Russia.

Clinton was going to the Middle East for talks in Jerusalem, Ramallah and Cairo. An Israeli source said she was expected to meet Netanyahu on Wednesday.

"Her visits will build on American engagement with regional leaders over the past days - including intensive engagement by President Obama with Prime Minister Netanyahu and President Mursi - to support de-escalation of violence and a durable outcome that ends the rocket attacks on Israeli cities and towns and restores a broader calm," a State Department official said.

In Cairo, Ban called for an immediate ceasefire and said an Israeli ground operation in Gaza would be a "dangerous escalation" that must be avoided.

He met in Cairo with Arab League chief Nabil Elaraby and Egyptian Prime Minister Hisham Kandil before travelling to Israel for discussions with Netanyahu. Ban planned to return to Egypt on Wednesday to see Mursi.

NEXT MOVES

Netanyahu and his top ministers debated their next moves in a meeting that lasted into the early hours of Tuesday.

"Before deciding on a ground invasion, the prime minister intends to exhaust the diplomatic move in order to see if a long-term ceasefire can be achieved," a senior Israeli official, speaking on condition of anonymity, said after the meeting.

Hamas leader Khaled Meshaal said on Monday that Israel must halt what he described as its attack on the Gaza Strip and lift the blockade of the Palestinian territory in exchange for a truce.

In the Gaza Strip on Tuesday, Hamas executed six alleged collaborators, whom a security source quoted by the Hamas Aqsa radio "were caught red-handed" with "filming equipment to take footage of positions". The radio said they were shot.

A delegation of nine Arab ministers, led by the Egyptian foreign minister, visited Gaza in a further signal of heightened Arab solidarity with the Palestinians.

Fortified by the ascendancy of fellow Islamists in Egypt and elsewhere, and courted by Sunni Arab leaders in the Gulf keen to draw the Palestinian group away from old ties to Shi'ite Iran, Hamas has tested its room for manoeuvre, as well as longer-range rockets that have also reached the Tel Aviv metropolis.

Egypt, Gaza's other neighbour and the biggest Arab nation, has been a key player in efforts to end the most serious fighting between Israel and Palestinian militants since a three-week Israeli invasion of the enclave in the winter of 2008-9.

The ousting of U.S. ally Hosni Mubarak and the election of Mursi is part of a dramatic reshaping of the Middle East wrought by Arab uprisings and now affecting the Israeli-Palestinian conflict.

Mursi, whose Muslim Brotherhood was mentor to the founders of Hamas, on Monday took a call from Obama, who told him Hamas must stop rocket fire into Israel - effectively endorsing Israel's stated aim in launching the offensive last week. Obama also said he regretted civilian deaths - which have been predominantly among the Palestinians.

Mursi has warned Netanyahu of serious consequences from an invasion of the kind that killed more than 1,400 people in Gaza four years ago. But he has been careful not to alienate Israel, with whom Egypt's former military rulers signed a peace treaty in 1979, or Washington, a major aid donor to Egypt.

Addressing troops training in southern Israel, Defence Minister Ehud Barak said: "Hamas will not disappear but the memory of this experience will remain with it for a very long time and this is what will restore deterrence."

But he said: "Quiet has not yet been achieved and so we are continuing (the offensive) ... there are also diplomatic contacts -- ignore that, you are here so that if the order for action must be given - you will act."

Hamas said four-year-old twin boys had died with their father when their house in the town of Beit Lahiya was struck from the air during the night. The children's mother was critically wounded, and neighbours said the occupants were not involved with militant groups.

Israel had no immediate comment on that attack. It says it takes extreme care to avoid civilians and accuses Hamas and other militant groups of deliberately placing Gaza's 1.7 million people in harm's way by placing rocket launchers among them.

Nonetheless, fighting Israel, whose right to exist Hamas refuses to recognise, is popular with many Palestinians and has kept the movement competitive with the secular Fatah movement of Palestinian President Mahmoud Abbas, who remains in the West Bank after losing Gaza to Hamas in a civil war five years ago.

"Hamas and the others, they're our sons and our brothers, we're fingers on the same hand," said 55-year-old Faraj al-Sawafir, whose home was blasted by Israeli forces. "They fight for us and are martyred, they take losses and we sacrifice too."

Along Israel's sandy, fenced-off border with the Gaza Strip, tanks, artillery and infantry massed in field encampments awaiting any orders to go in. Some 45,000 reserve troops have been called up since the offensive was launched.

Israel's shekel rose on Tuesday for a second straight session while Tel Aviv shares gained for a third day in a row on what dealers attributed to investor expectations that a ceasefire deal was imminent.