The Gaza Health Ministry says the death toll from Israeli airstrikes on Gaza has climbed to 43, including 13 children and three woman.
It says nearly 300 Palestinians in the territory have been wounded in the strikes, which began Monday as Palestinians launched a barrage of rockets into Israel.
The worst fighting since the 2014 Gaza war was ignited by clashes in Jerusalem in recent weeks between Palestinian protesters and Israeli police focused on the Al-Aqsa Mosque compound, a site sacred to Jews and Muslims.
In Gaza, one multi-story residential building, whose occupants were warned in advance by Israel to evacuate, collapsed and another was heavily damaged after they were repeatedly hit by Israeli air strikes.
Israel said its warplanes had targeted and killed several Hamas intelligence leaders early on Wednesday. Other strikes hit what the military said were rocket launch sites, Hamas offices and the homes of Hamas leaders.
It was the heaviest offensive between Israel and Hamas since a 2014 war in the Hamas-ruled enclave, and prompted international concern that the situation could spiral out of control.
"Israel has gone crazy," said one man on a Gaza street, where people ran out of their homes as explosions rocked the city.
Many Israelis also spent a sleepless night, with sirens sounding at 3 a.m. in Tel Aviv, heralding several waves of rocket strikes in Israel's heartland.
"The children have escaped the coronavirus, and now a new trauma," one Israeli woman in the coastal city of Ashkelon said on Channel 11 television.
U.N. Middle East peace envoy Tor Wennesland said the United Nations was working with all sides to restore calm.
Gazans' homes shook and the sky lit up from Israeli attacks, outgoing rockets and Israeli air defence missiles.
Israelis ran for shelters or flattened themselves on pavements in communities more than 70 km (45 miles) up the coast and into southern Israel amid sounds of explosions as interceptor missiles streaked into the sky.
In the mixed Arab-Jewish town of Lod, near Tel Aviv, two people were killed after a rocket hit a vehicle. Lod and other mixed towns have been gripped by demonstrations over the Gaza violence and tensions in Jerusalem.
NEW CHALLENGE
Hamas's armed wing said it fired 210 rockets towards Beersheba and Tel Aviv in response to the bombing of the tower buildings in Gaza City. Israel's military says that around a third of the rockets have fallen short, landing within Gaza.
For Israel, the militants' targeting of Tel Aviv, its commercial capital, posed a new challenge in the confrontation with Hamas, regarded as a terrorist organisation by Israel and the United States.
The violence followed weeks of tension in Jerusalem during the Muslim fasting month of Ramadan, with clashes between Israeli police and Palestinian protesters in and around Al-Aqsa Mosque.
These escalated in recent days ahead of a – now postponed - court hearing in a case that could end with Palestinian families evicted from East Jerusalem homes claimed by Jewish settlers.
Violence has also flared in the occupied West Bank. Medical sources said a 16-year-old Palestinian was killed in clashes with Israeli forces on Wednesday.
"VERY HEAVY PRICE"
There appeared no imminent end to the violence. Israeli Prime Minister Benjamin Netanyahu warned that militants would pay a "very heavy" price for the rockets.
On Tuesday, Gaza health ministry officials put the death toll at 32, but a Hamas-affiliated radio station later said three more people were killed early on Wednesday. The Israeli military said it killed at least 25 militants.
Israeli health authorities said five people had been killed since Monday by rockets that slammed into homes or exploded in the street.
Hamas leader Ismail Haniyeh said Qatar, Egypt and the United Nations had been in contact urging calm but his group's message to Israel was: "If they want to escalate, the resistance is ready, if they want to stop, the resistance is ready." The White House said on Tuesday that Israel had a legitimate right to defend itself from rocket attacks but applied pressure on Israel over the treatment of Palestinians, saying Jerusalem must be a place of coexistence.
Although the latest problems in Jerusalem were the immediate trigger for the hostilities, Palestinians have been growing ever more frustrated as their aspirations for an independent state have suffered a series of setbacks in the past few years.
These include Washington's recognition of disputed Jerusalem as Israel's capital, a U.S. plan to end the conflict that they saw as favourable to Israel, and continued settlement building.
PLUMES OF BLACK SMOKE
Israel said that in addition to the air operations, it had dispatched infantry and armour to reinforce the tanks already gathered on the border, evoking memories of the last Israeli ground incursion into Gaza to stop rocket attacks in 2014.
Witnesses said that early on Wednesday Israeli aircraft destroyed Gaza's Hamas-run police headquarters in the city.
Hamas said that two of its local commanders were killed in an Israeli air strike on a house in Gaza. Israel said one of the buildings it attacked housed several Hamas offices.
"I can tell you there are other, similar targets planned as well," Lieutenant-Colonel Jonathan Conricus, an Israeli military spokesman, said.
Gaza's health ministry said that of the people reported dead in the enclave, 10 were children. The Israeli military said it was looking into the reports that children had been killed and that preventing civilian casualties was a priority.