By Bassam Masoud and Nidal al-Mughrabi GAZA/CAIRO (Reuters) – Israeli troops fought fierce battles with Hamas in south Gaza on Wednesday in the heart of the city of Khan Younis, forcing Palestinian civilians, many already displaced from the north, to search for refuge elsewhere with their options dwindling. Israeli warplanes also bombarded targets across the densely populated coastal strip in one of the heaviest phases of the war in the two months since Israel began its military campaign to eliminate Hamas, Gaza’s ruling Palestinian militant group. Israeli Prime Minister Benjamin Netanyahu sai…