* 18 Gaza families have lost 4 or more members in strikes
* Rights groups say mass civilian deaths may be war crimes
* Israel says Hamas turned neighbourhood into "terror nest"
By Nidal al-Mughrabi
GAZA, July 23 (Reuters) - Sitting at home for dinner or running for their lives in dark streets, generations of the same families are dying in Israel's bombardment of Gaza.
Survivors are witnessing large numbers of relatives killed in a single strike and in their grief seek justice. According to a Reuters tally, at least 18 families in the Palestinian enclave have lost four or more members. One lost 27.
Israel says it seeks to target only militants who are firing rockets from the coastal strip into its territory, but the U.N. High Commissioner for Human Rights Navi Pillay said on Wednesday that the killing of over 400 Gaza civilians in the last two weeks may constitute war crimes.
Rights campaigners and Israel say the rocket fire aimed at Israeli cities by militants from Hamas and other Palestinian groups also breaks international law.
When Israeli shells rained down nearly non-stop in the early hours of Sunday morning, the Ayyad family cowered in their hallway too scared to escape the border town of Shejaia, once home to 100,000 and now a rubble-filled war zone.
At first light, they made their move. Mothers swept up toddlers in their arms and fathers clasped children's hands. "We walked, then ran as a group but they shelled us ... I'll never forget the image I saw as long as I live. It may even follow me to my grave," said Imran, 29.
Eleven of their number, including a pair of two-year olds, lay amid the dust and fallen trees.
"Painfully enough, we decided to help some of the lightly wounded who could walk, but we left the martyrs on ground. We left our beloved cousins dead. Can you believe it?" he said.
Relatives gathered at Gaza's main Shifa hospital where three family members were being treated for their injuries. But no one had yet summoned the courage to tell one young woman sprayed with shrapnel how much she had lost that morning.
"She's my daughter. I can't tell her that her son, the one she gave birth to after eight years of marriage, was killed," said the woman's mother, Umm Osama Ayyad. "Her husband is also dead. We can't tell her, she may die of shock...I don't want to lose her too. We've suffered enough already."
Israel's army, which describes Shejaia as a "terror nest", says it takes pains to avoid killing innocent people, warning residents of such areas to evacuate before it opens fire. It also alerts occupants of targeted buildings by telephone and drops dummy missiles before firing lives ones.
"When people do not leave their houses despite our warnings, then that is bad. We are a serious military. When we warn that you should leave a specific area then you should leave," said Israeli military spokesman Lieutenant-Colonel Peter Lerner.
Locals say they have few safe havens in the crowded Gaza Strip, where 1.8 million live, with Israel and Egypt sealing their borders and the United Nations struggling to shelter more than 100,000 displaced people.
Lerner said Hamas uses civilians as human shields and has deliberately set up its command centres in built-up areas such as Shejaia, where the Israeli military says it has uncovered a vast tunnel network.
However, he acknowledged there might have been errors. "We recognise there is a human tragedy going on in Gaza and there can be mistakes in warfare. We are accountable, we investigate, we look into the cases," he said.
Samir Zaqout of the Al-Mezan Center for Human Rights in Gaza said he is confident that "sooner or later" Israeli leaders will be held accountable by international justice.
"What can we call these atrocities but war crimes? What happened in Shejaia was a massacre and a multiple war crime. The occupation army fired tank shells, which are mostly inaccurate, into the entire suburb and killed people indiscriminately inside their houses and as they fled," he said.
Local medical staff say 72 Palestinians died, mostly civilians, as Israel battled Islamist militants on Sunday. Twelve Israeli soldiers were killed in the assault, its largest loss of life in a single day since 2006. They were among 29 troops killed since a ground incursion began on Saturday.
WHERE IS JUSTICE?
For Tareq Abu Jamea', 40, of the southern city of Khan Younes, the distance between life and the instant death of 27 extended family members plus a visiting brother-in-law was just over a metre (yard).
Mosque loudspeakers had just announced the evening invitation to break the Ramadan fast, and while his brothers and their families were dining he stepped out for a moment.
As soon as he left the house, the blast crashed down, sending him flying "like a bird" into the air and far away. "My leg was broken and I suffered a cut as well. I kept my head down and watched as death took away 28 of my family."
A grandmother, a pregnant woman, and 19 children including four babies were crushed under the rubble.
"Their aim throughout this war is to kill civilians ... They gave us no warning, no phone call and no warning missiles from the drone as they claim to," Abu Jamea' told Reuters.
Jamea' wants Israelis to face international justice in The Hague. "I wonder where is the pride of the world? Where is justice? Why aren't they sent to the International Court of Justice? Are they above the law?" he told Reuters.
Abu Jamea' said his family had no connection to any political groups. Israel says it is looking into the incident.
Israeli rights group B'Tselem says it believes the brother-in-law killed that night was a suspected Hamas operative, and was the likely target.
Ten Israeli human rights organisations including B'Tselem said the army's shelling of Shejaia may have violated the "fundamental principles of the laws of war, specifically the principle of distinguishing between combatants and civilians".
Warning calls or the presence of militants among groups of civilians could not justify the mass death incidents under international law, they said.
Some Israeli officials have said they dare Palestinians to make good on threats to bring cases against it at the International Criminal Court - they say militant rocket attacks directed at their towns would make for an easy countersuit.
Amnesty International said on Tuesday that both sides "have repeatedly violated international law with impunity (and) must be held accountable".
This will be of little consolation for the al-Halaq family. They fled the artillery fire raining down on Shejaia to a flat in a multi-storey apartment building in the Remal area of downtown Gaza.
Just before dinner, an apparent missile fired from a plane hit the building, killing eight members of the family - both among those who fled and their hosts.
The youngest victim was just five. "They escaped death in Shejaia, thinking the Remal area would be safer, but the Israelis didn't want to spare their lives," wept one relative, who declined to be named.
"I have no faith in the world, not any more," he said. (Additional reporting by Crispian Balmer in Jerusalem; Writing by Noah Browning; editing by David Stamp)