GAZA, Nov 18 (Reuters) - Barefoot boys chase each other in circles around the street, pointing pretend guns made out of rubber pipes up at the Gaza sky, which is thick with Israeli F-16s and surveillance drones.

"We're not afraid of the Jews' bombs!" said Sharif al-Ewad, whose plump cheeks make him look younger than his 15 years. "Al-Qassam (Hamas's armed wing) has raised its head high, and is really beating them up this time!" he smiled.

But beneath the swagger and bravado there is also a yearning for peace and quiet after five days of Israeli airstrikes that killed at least 65 Palestinians, including 20 children.

With one of the youngest populations in the world, over half of Gaza's 1.7 million residents are aged under 18 and they have little to comfort them beside the heady local culture of armed struggle against Israel.

The Jewish state pulled its troops and settlers out of the coastal territory in 2005 but ever since has come under regular rocket fire from Islamist group Hamas and its allies in the Gaza Strip, which refuse to recognise Israel's right to exist.

Israel launched its latest widescale operation last Wednesday with the stated aim of putting a halt to the attacks.

Psychiatrist Hasan Zeyada says the constant exposure to shocking violence has left many children suffering trauma and all that it entails -- bed-wetting, nightmares, flashbacks, and fear of going out in public.

"Part of this is related to our culture and religion, which values sacrifice and duty. The other part is a kind of denial. it's normal to be scared, but in the messages they've watched and heard, they're taught just to show strength," said Zeyada, manager of the Gaza Community Mental Health Program.

"When there's no safe place to go, they respond naturally with denial. In a situation like Gaza's, the best families and the community can do for children is to keep them close and go about life as normally as possible," he said.

That isn't very easy.

SMALL VICTIMS

With schools shut while the fighting rages, some children express delight at their newfound freedom. "Of course we're happy!" squealed one boy, drawing out giggles from his mates.

Looking more serious, Sharif shook his head. "No, it's no good. We want to learn. It's boring, and our parents try to make us stay inside. But we're not scared," he insisted.

On the other side of the fence, Israeli schools are also shuttered within a 40-km radius of Gaza because of an incessant rain of incoming rockets, with children confined to their homes.

Tragically, some young Gazans will never get to see school.

Tamer, 1, and Joumana Abu Sefan, 3, were blasted from their beds by an Israeli strike early on Sunday. Their father Salama, blood gushing down his face from his owns wounds, rushed them to hospital, where they were pronounced dead.

Male relatives stared on in tears, women cried out and swooned while the little bodies were swaddled in white cloth and gauze was placed in their nostrils to keep still-flowing blood from staining their faces.

At their joint funeral march just hours later, Salama cradled their heads as uncles held them aloft at his side.

Green Hamas flags were suddenly draped over their shrouds, and the militant group's religious songs, playing in the background, announced that the tiny pair had achieved martyrdom and that heaven would be their reward.

"What does Israel want with their blood?" Salama heaved, inconsolable and seeming to sleepwalk through the spectacle.

For its part, Israel denies targeting civilians and says it is constantly warning residents, who it says are used by as human shields, away from areas where militants operate.

Abdullah Zumlot, 15, the first hints of moustache speckling his upper lip, scoffed at this as he loitered around the hospital where the Abu Sefan children were earlier carried away.

"It's not fair what we have to live through, we're not happy. All my family and I do is sit at home and watch the news 24 hours," he complained. (Editing by Crispian Balmer)