"We must be prepared for a lengthy campaign," Netanyahu said in a speech broadcast live, soon after the news of the shelling of the Eshkol region that also reportedly wounded at least 12 people.
"Israeli citizens cannot live with the threat from rockets and from death tunnels -- death from above and from below," he said.
"We will not end this operation without neutralising the tunnels whose sole purpose is killing our citizens," he said, referring to a sophisticated network of cross-border tunnels used by militants to infiltrate southern Israel.
Dealing with the tunnels was the "first and essential step in demilitarising the Gaza Strip," which along with disarming militants must be part of "any solution, and the international community must insist on it," Netanyahu said.
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The Israeli premier also demanded the international community supervise and monitor construction materials entering the Gaza Strip, which he said were used to construct tunnels.
Defence Minister Moshe Yaalon also spoke of a lengthy campaign saying it could take "many more days until the quiet is restored."
"Gaza residents should distance themselves from areas in which Hamas is acting because we will get there and it will be painful," he said, shortly after the army sent messages to residents living near Gaza City to flee their homes.
"A short while ago, phonecalls were made and text messages were sent out to the civilian population of Shejaiya, Zeitun and eastern Jabaliya calling them to evacuate immediately towards central Gaza City," an army statement said, referring to areas north, south and east of Gaza City.