The bearded young Hamas fighter stood beneath a shop’s awning in the centre of Gaza City as he tried to hide from Israeli drones. “Gaza will be like a volcano erupting beneath the Israelis. It will destroy the legend of their invincible army,” he boasted as the street echoed to the sound of distant gunfire and explosions.

“We are soldiers who run towards death. They run away from it,” he declared as the Israeli army engaged in some of the fiercest fighting yet on the city’s fringes. “The Israeli leaders are gambling their future by coming into the mud of Gaza. They will leave defeated.”

Mohammed achieved his childhood dream of joining the Izz al-Din al-Qassam Brigades, the military wing of Hamas, at the age of 18. He trained as a signaller, was taught how to fire rocket-propelled grenades and was given his own AK47. Now 24, he is married only to his cause and religion. With an easy smile that masks his fanaticism, he described some of the elaborate plans Hamas has laid to ensnare Israeli soldiers in Gaza’s labyrinthine streets and alleys.

He spoke of a huge network of tunnels designed to enable Hamas fighters to attack and retreat, to ambush and kidnap, to blow up Israeli vehicles passing overhead and move undetected by aerial surveillance. He talked of mines which have been laid but are not primed until the Israelis approach. He described how plans had been prepared to defend each part of the city, and how they were immediately changed when a fighter was captured. If a fighter was killed, another was trained to take his place.

He said the fighters constantly changed their locations and tactics. They never attacked from the same place twice. They had secret means of communication, and spread disinformation to confuse the Israelis when speaking on their radios. They wore civilian clothes, concealed their weapons, and no longer walked around in groups.

Morale was high, Mohammed insisted. Hamas had lost fewer fighters than expected and there was an infinite supply of eager replacements for those “martyred”. It still had plenty of rockets that could be launched remotely from hidden bunkers. “We can continue as long as it takes,” he said. “I tell you, even our ghosts will defeat the Israelis.”

By contrast, the Israeli military suggests that Hamas is on the run.

Major-General Yoav Galant, the head of the Southern Command, told the Security Cabinet at the weekend that Operation Cast Lead had created a “once in a generation” opportunity to destroy Hamas, and called for the deployment of thousands more troops in Gaza.

A senior officer said that more than 300 Hamas fighters had been killed and “entire companies and battalions have been simply wiped out”. Another claimed that Amir Mansi, the commander of Gaza City’s rocket division, was killed on Saturday because Hamas fighters were running scared and he had to go out and fire mortars himself. “We are seeing people deserting and going AWOL among Hamas’s combat personnel. They are afraid to go out and fight,” he said.

Impartial observers believe that the battle is far from over, and that Mohammed and his fellow zealots remain a very serious threat.

Ronen Bergman, an Israeli security expert and author of The Secret War with Iran, said Hamas had watched how Hezbollah successfully resisted the Israeli invasion of southern Lebanon in 2006, accepted training and equipment from Iran, and transformed itself into a disciplined, professional organisation that posed a real threat. “If Israel sends troops into the built-up areas of Gaza, they will find themselves facing a very formidable opponent,” he said.

Ron Ben-Yishai, a senior military correspondent with the Israeli newspaper Yediot Aharonot, who travelled with Israeli troops last week, said he was “amazed” by Hamas’s preparations. Whole blocks, not just individual houses, had been booby-trapped and wired. “We have seen things like this before, but not of this magnitude.”

A detailed, hand-drawn Hamas map of a neighbourhood called Al-Atatra, discovered by Israeli paratroopers last week on the body of a Hamas fighter, showed tunnels, sniper positions next to a mosque and numerous explosive devices planted in roads, homes and a petrol station. The neighbourhood had been divided into three, with a team of fighters allocated to each.

Mr Ben-Yishai told The Times that his unit found a mannequin filled with explosives in a hallway in the Zaytun area of Gaza City. It was dressed in a Hamas fighter’s black uniform. Had Israeli soldiers fired on it, it would have exploded and brought down the building. In the hallway of another house, a 30-gallon container of diesel fuel had been placed on two sacks of explosives, with a detonation wire running through a tunnel to a shack 200 metres away. Instead of entering houses through doorways, Israeli soldiers now blow holes in the walls and send sniffer dogs in first.

Suicide bombers are another hazard. On Saturday a man wearing an explosives belt sprang from a side alley in Jabaliya as an Israeli patrol walked past. They shot him seconds before he could detonate himself. Early in the ground war a suicide bomber ran up to a lone Israeli bomb dismantler and literally hugged him as he blew them both up. There have been several such attacks in the past week, two by women.

Hamas has yet to capture an Israeli soldier — a top priority — but is trying hard. Reshef, an Israeli soldier wounded during an engagement in the Jabaliya refugee camp, told The Times: “Hamas was playing cat and mouse, trying to lure us into the tunnels they had prepared. They were firing from the tunnels, trying to get us to engage them and follow them in. Once inside the tunnels there were dozens more waiting to ambush.”

Another Hamas tactic, said Mr Ben-Yishai, was to spring from tunnels concealed beneath floors, or behind sinks in houses where Israeli troops were sheltering, and open fire.

In many ways it is far easier for Hamas to achieve “victory”. All it must do is to survive as international pressure on Israel grows, keep firing rockets across the border, and erode Israeli support for the war by picking off soldiers. Mohammed already claims victory. “We have stood in the face of the strongest army in the region for two weeks,” he bragged.

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