* Palestinians in Gaza see life under blockade as a slow death
* Locals back militant rejection of ceasefire, demand more
By Noah Browning
GAZA, July 16 (Reuters) - Asked if a quick ceasefire with Israel might at least be welcome for saving lives, Abu Hashem simply scoffed.
"We're living death," he said.
The 50-year old father of two strolled in the shade of a street in Gaza city, unfazed by the periodic thud of bombings.
"Israel has put us under siege for eight years, and the whole time we never felt we weren't at war. People here have been left with nothing, so what more do we have to lose now?"
Hamas and other militants have spurned an Egyptian truce deal to end nine days of fighting with Israel. That decision means bombs have continued to fall on the enclave. But many here support it anyway, saying their bleak peacetime life under an Israeli-Egyptian blockade was barely worth living.
Gaza medical officials say 208 Palestinians, including at least 174 civilians, among them 37 children, have been killed in strikes on the coastal enclave, an operation Israel says is aimed at halting rocket fire by Hamas and other militant groups.
Israel says the militants have fired more than 1,200 rockets at it since July 8. One Israeli civilian has been killed.
Israel accepted the ceasefire on Tuesday. But the armed wing of Hamas dismissed it as "an initiative for kneeling and submission" and redoubled rocket fire.
Hamas and other militant groups say any deal must include a commitment to completely lift the blockade on Gaza, which has pushed poverty and unemployment to around 40 percent and caused many Palestinians to lose hope in their future.
"Our situation is impossible to describe. It must end," said Abu Hashem. "Israel knows a truce with no meaning is rejected by us, so now it feels it has a reason to hit us even harder."
Israel says it takes pains to avoid civilian deaths when targeting militants and sources of their fire, and its blockade is needed to prevent militants from obtaining weapons.
Prime Minister Benjamin Netanyahu has said Hamas is inured to its people's pain and uses them as "human shields".
"It would have been preferable to resolve this by diplomacy and we tried to do so when we acceded to the Egyptian ceasefire proposal. But Hamas left us no choice but to broaden and intensify the campaign against it," he said on Tuesday.
Hamas, which refuses to lay down its arms or recognise Israel, won parliamentary polls in 2006 and seized control of the densely-populated Gaza Strip the next year. Israel and Egypt have restricted the import of many goods ever since.
SEWAGE ON THE BEACH
Life in the densely-populated enclave has worsened in the last year since Egypt demolished hundreds of border smuggling tunnels which brought in weapons but were also the lifeblood of Gaza's struggling economy.
Over half of Gaza's 1.8 million people are on United Nations food aid. Electricity is cut for eight hours at a stretch. Building material to accommodate the mushrooming population is scarce. Taps spit out salty, often contaminated water.
Lack of fuel at sewage treatment plants has caked the beaches - one of the strip's few diversions - in toxic waste.
"We can only stay steadfast and trust in God, despite our conditions. Nobody has done anything for us - we feel like all the Arabs have abandoned us, Egypt just wants us to give in the rest of the world is silent," said Ahmed Sha'ir, 18.
"We have no doubt in the resistance.... If it takes a long campaign to get our rights, we're ready," he said.
A similar 8-day round of fighting in November 2012 was ended by an Egyptian-mediated truce which included promises to pursue the easing of curbs on Gaza's coastal fishing industry, farming in Israeli border areas and the movement of goods and people through Egypt. Almost none of these conditions lasted.
Robert Turner, the Gaza director of UNRWA, the main U.N. agency in the area which is now sheltering some 18,000 people fleeing the fighting, said a return to that status quo may bring few benefits to people.
"A return to 'calm' is a return to ...confinement to Gaza and no external access to markets, employment, or education - in short, no access to the outside world," Turner said on UNRWA's website on Wednesday.
He noted that between March 2013 and May 2014 Israel did not approve any of his agency's $100 million worth of projects to build schools and rebuild homes damaged in previous conflicts.
Israel cites militant attacks and attempts to infiltrate into Israel though underground tunnels in maintaining its land and sea limits on Gaza. It has said it is committed to facilitating development and trade there after examining whether projects could have any possible military applications.
But among average Palestinians, faith in Israel or a swift turn in their own fortunes is almost non-existent.
"That country respects no agreements and breaks any deal to serve its own interests. Anything it does for us, it has to be forced," said Ameen Abu Al-Kas, a vegetable seller in Gaza City.
"We've seen them attack us and stop a hundred times and things still get worse. We're beyond tired, we're dead." (Editing by Peter Graff)