Israel and the Palestinians battled each other for a third day on Saturday with rockets fired from Gaza wounding three in southern Israel while Israeli planes attacked the coastal enclave in the early hours.

In a tragic irony, the casualties from Saturday's early-morning rocket fire on the southern Israeli city of Ashdod were all illegal Palestinian workers, sleeping rough.

Egypt has decided to withdraw its ambassador to Israel to protest the deaths of five policemen killed on the border during retaliatory attacks on Palestinian militants, state television said Saturday.

"Egypt has decided to withdraw its ambassador to Israel until there is an official apology," it said. Egypt's military chief of staff, Sami Enan, headed to the Sinai on Friday to probe the deaths of the policemen killed a day earlier.

The EU announced late Friday that 20 new names have been added to a list of Syrian individuals and businesses hit with sanctions, with a deal also now close for a ban on oil imports.

European Union governments meeting in Brussels also decided to prepare detailed plans for an embargo on the import of Syrian crude oil into the bloc and suspending assistance to Syria by the European Investment Bank.

Libyan rebels on Friday claimed to control the strategic town Zawiyah and its key refinery after seizing the hospital, an Agence France Presse journalist said.

"Zawiyah is free," said rebels as they took up positions in the hospital hours after pounding the center of the town, which is the last major barrier before the rebels can think about advancing on Tripoli from the west.

The United States and Iraq have not yet agreed to a post-2011 American military training mission, an aide to the Iraqi premier said Friday, after the U.S. defense chief said Baghdad had given the okay.

"We have not yet agreed on the issue of keeping training forces," Ali Moussawi, media advisor to Prime Minister Nouri al-Maliki, told Agence France Presse.

Accounts of the attacks that killed eight Israelis near the border with Egypt on Thursday paint a picture of an operation carefully planned and executed.

The triple attacks, attributed by Israel to radical Palestinian activists from the Gaza Strip, took the army and police by surprise, judging by the ensuing confusion and inaccuracy of initial reports.

Libyan rebels said they seized control of Zliten from Moammar Gadhafi's forces on Friday, only hours after reporting they were in the center of the town, 150 kilometers east of Tripoli.

"Zliten is now under the control of our fighters, but the fighting is not finished," the Information Center For Misrata Military Council said.

Egypt protested to Israel on Friday and demanded a probe into the deaths of its policemen a day earlier on the Israeli border as Israeli troops pursued militants behind deadly attacks, the official MENA news agency reported.

"Egypt filed an official complaint with Israel following yesterday's deaths at the border between Israel and Egypt," the agency reported.

Gaza militants blamed for shooting attacks near the Egyptian border that killed eight Israelis, denied Friday that they were involved, as the hunt for the killers moved to Egypt.

"We salute (the operation) and we are proud of it, but we do not claim it," Popular Resistance Committees spokesman Abu Mujahid told Agence France Presse in the Gaza city of Rafah as the faction buried five members killed in a retaliatory Israeli air strike a day earlier.

The European Union is preparing sanctions against Syria's key oil sector, a European diplomatic source told Agence France Presse Friday.

"The EU is preparing sanctions against the petroleum sector and envisions eventually an embargo on all Syrian oil imports," the diplomat who requested anonymity said.