Israel Defence Forces chief of Staff Lt Gen Benny Gantz requested the call-up of 40,000 reserves in order to replace conscripted forces in the West Bank, and enable their deployment to the Gaza border.
The Prime Minister's Office did not confirm reports that the security cabinet approved the request which was made hours after Operation Protective Edge was launched in an effort to quell rocket fire from the Gaza Strip, Jerusalem Post reported.
"Hamas chose to escalate the situation and it will pay a heavy price for doing so," Netanyahu said during the meeting.
Netanyahu said that the time had come to "take off the gloves" against Hamas.
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"The Prime Minister's instruction by the end of the meeting was to prepare for a thorough, long, continuous and strong campaign in Gaza," a senior official said.
"The Prime Minister instructed the army to be ready to go all in. A ground offensive is on the table," he added.
Operation Protective Edge, which has seen airstrikes targetting 100 Hamas positions in Gaza Strip, came after more than 250 rockets were fired into southern Israel in recent weeks.
An airstrike on a car in Gaza City killed four people, Palestinian medics said. It came shortly after another air strike killed a Palestinian in central Gaza.
In a separate incident, a missile slammed into a house in the southern city of Khan Yunis killing seven people and wounding 25 others, medics said.
"Our increased response will be well felt on the ground," he said. Palestinian president Mahmud Abbas today demanded immediate halt of all military operations against Gaza.