Reuters: Bodies of Israelis and Palestinians lie on the ground near Sderot

Bodies of Israeli residents and Palestinian fighters were laid out in the grounds of the Kfar Aza communal settlement among burned-out houses, strewn furniture and torched cars, as Israeli soldiers went from house to house to take away the dead.

The Israeli army took the foreign press through the site on Tuesday, which was one of the hardest hit areas when Hamas attacked Israel from the Gaza Strip.

The stench of bodies was heavy in the air as reporters walked the paths of Kfar Aza, near Sderot.

Outside one of the small houses of the communal settlement the body of a resident was covered by a purple sheet with a bare foot protruding.

Elsewhere bodies of Palestinians lay face down on the ground.

Israeli troops were going house to house to retrieve civilian bodies, which they had not been able to before as they were still fighting armed Palestinians and working through booby-traps.

Soldiers were still securing the paths of the settlement as bursts of gunfire and explosions could be heard in the distance.

Jets could be heard above and smoke could be seen rising from Gaza. Sirens warned of incoming rockets intercepted overhead.