Israeli warplanes kept up deadly raids on Gaza Thursday but failed to stop Palestinian militants firing rockets across the border, while international appeals mounted for a truce.
As the violence worsened, US President Barack Obama told Israeli Prime Minister Benjamin Netanyahu that his government was willing to broker a ceasefire.
In a phone call related by the White House, Obama said he was concerned the fighting could escalate and "called for all sides to do everything they can to protect the lives of civilians".
UN chief Ban Ki-moon also appealed for an immediate ceasefire at an emergency meeting of the Security Council, saying it was "more urgent than ever" to establish a ceasefire.
Russian President Vladimir Putin issued a similar plea in a phone call to Netanyahu, urging an immediate end to the bloodshed and expressing concern over civilian casualties.
In a phone call with Palestinian president Mahmud Abbas, French President Francois Hollande condemned civilian tolls from Israeli rocket fire and called Palestinians and Israelis to urgently seek a lasting peace agreement.
But Israel appeared bent on dealing a fatal blow to the Islamist movement Hamas which controls Gaza, with Netanyahu reportedly saying talk of a ceasefire was "not even on the agenda".
Israeli air strikes killed more than 30 Palestinians on Thursday alone, many of them women and children.
Hamas, the Palestinian group ruling Gaza, also appeared to have no interest in letting up, striking deep inside Israel over the past 48 hours, with rockets crashing down near Jerusalem and Tel Aviv and even as far away as Hadera, 116 kilometres (72 miles) to the north.
Sirens wailed across Jerusalem for the second time running and a series of loud explosions echoed across the city as the Iron Dome anti-missile system shot down two rockets fired from Gaza, the army said.
Another two crashed down in open areas in the occupied West Bank, one hitting near the Maaleh Adumim settlement and the other landing near Ofer, an Israeli military prison just west of Ramallah, witnesses and security officials told AFP.
Hamas militants said they fired "four M75 rockets at Jerusalem". So far, none of the rockets has claimed Israeli lives.
- Empty streets -
Since the start of the Israeli campaign in the early hours of Tuesday, some 90 Palestinians have been killed and more than 500 injured, according to Gaza's emergency services spokesman Ashraf al-Qudra.
As the number of victims in Gaza rose, Egypt opened the Rafah border crossing, with hospitals in north Sinai placed on standby to receive the wounded, Egyptian state news agency MENA said.
"We are still facing a difficult, complex and complicated campaign," Netanyahu said after a security cabinet meeting.
The violence has emptied the streets from Gaza City to Tel Aviv, as both Israelis and Palestinians take shelter indoors for fear of being caught in the open when the next rocket or missile hits.
Israel has confirmed preparations are under way for a possible ground attack, with tanks seen massing along the border and Netanyahu facing mounting pressure from coalition hardliners to put boots back on the ground in the territory from which Israeli troops and settlers withdrew in 2005.
"If we can achieve our goals without a ground operation, we would prefer it this way," said Yossi Kuperwasser, director general of strategic affairs ministry.
- 860 sites bombed -
Since the start of the operation, the Israeli military's biggest offensive on Gaza since November 2012, its forces have hit over 860 "terror sites", 110 of them on Thursday.
In the same period, Gaza militants fired 490 rockets, of which more than 370 struck Israel, while another 87 rockets were intercepted, an army statement said. Of the total, over 120 struck Israel on Thursday, while another 24 were intercepted.
Neither side has shown any sign of backing down, and Israel has approved the call-up of 40,000 reservists.
Analysts said Hamas had a clear aim: to drag Israel into a ground war hoping to inflict heavy casualties on its troops who would likely come under fire from anti-tank missiles and explosive devices.
Militants would also be seeking to capture Israeli soldiers to use as leverage.
In a news conference, Hamas's armed wing the Ezzedine al-Qassam Brigades issued a veiled threat to kidnap soldiers.
"The ground war will be a chance to free Palestinian prisoners," a spokesman said, while warning fighting on the ground could last "for several weeks".