An Israeli strike on a home in Gaza has killed at least 10 people, officials say, as Sunday became the deadliest day since Israel launched an operation against Hamas militants last week.
Israel said it had targeted a Hamas man but at least nine members of one family died, including several children.
Heavy bombardment of the strip was continuing early on Monday morning.
Gaza militants continue to fire rockets at Israel, with injuries reported in towns including Ashkelon and Ofakim.
Sources on both sides say attempts to reach a ceasefire are continuing, but PM Benjamin Netanyahu says Israel is ready to expand its operation.
At least 26 people were reported to have been killed in Gaza by Israeli bombardments on Sunday. Of those, at least 14 were women and children, Gaza health officials said.
This brought the death toll in Gaza since Israel launched its Operation Pillar of Defence on Wednesday to 72, the officials said.
Air strikes continued late into the evening, with BBC correspondents also reporting renewed shelling from Israeli warships.
Three Israelis were killed on Thursday.
The BBC's Paul Danahar arrived at the scene of the air strike on the home north of Gaza City to see diggers trying to scoop rubble from flattened buildings and with rescuers frantically trying to find survivors.
Hamas said policeman Mohamed Dalou and eight members of his family died, including a number of children, along with at least one other person.
Hamas's military wing later said in a statement: "The massacre of the Dalou family will not pass without punishment."
The casualties were taken to Shifa hospital, where earlier our correspondent had seen injured children brought in, one covered in blood.
Our correspondent said the hospital went from organised calm to frantic chaos as doctors tried to dress wounds. One nurse broke down in a corner and colleagues tried to comfort her.
Israel's chief military spokesman, Yoav Mordechai, told Israel's Channel 2 TV that the target had been Yehiya Rabiah, the head of Hamas's rocket-launching unit, but that there had been "civilian casualties".
Israel's Haaretz newspaper said the strike appeared to have mistakenly hit a neighbour's house.
BBC correspondents in Gaza said that at least seven homes belonging to Hamas officials had been targeted by Israeli strikes on Sunday.
Israeli government spokesman Mark Regev told the BBC it was trying to be as surgical as possible in its strikes, compared with what he called "indiscriminate" militant rocket attacks.
The Israel Defense Forces (IDF) said that 76 missiles fired from Gaza had hit Israel on Sunday, while another 38 were intercepted by its Iron Dome missile defence system, including at least one over Tel Aviv.
The Israeli ambulance service reported two people were seriously injured, with 10 moderately or lightly hurt.
Israel's state radio reported that a volley of 10 rockets had been fired at Ashdod, with three falling in a residential area and seven people treated for shock.
One rocket from Gaza made a direct hit on a residential building in Ashkelon, causing injuries and damage.
Another rocket hit a car in Ofakim, causing injuries, the IDF said.
Israel's attacks on Gaza had been stepped up again at about 02:00 (00:00 GMT), with the BBC's Jon Donnison in Gaza City reporting hearing more than a dozen shells, apparently fired from Israeli warships.
Two media buildings were struck in Gaza City, injuring eight Palestinian journalists, one of whom had to have a leg amputated.
Among those using the buildings were a Hamas television channel, al-Quds TV, as well as Sky News and ITN. The BBC had its offices in one of the buildings until last year.
Late on Sunday, two men from the same family were killed in an air strike close to the finance ministry, officials said, and a child was reported to have died in a separate attack in northern Gaza.
The World Health Organization says hospitals in Gaza are now overwhelmed with casualties and short on supplies.
Palestinian officials say a number of people are still missing under rubble and the total of injured since Wednesday is now 660.
The Save the Children charity said families were running out of food and water, with most trapped in their homes, enduring power cuts of up to 18 hours a day.
Separately, some 500 Egyptian activists crossed into Gaza on Sunday to show solidarity and bring medical supplies.
Steps are continuing to try to reach a ceasefire.
Egyptian security officials said a senior Israeli official had arrived in Cairo for talks but Israel has made no comment.
US President Barack Obama, speaking on Sunday, said Washington was "fully supportive of Israel's right to defend itself".
Mr Netanyahu said at a cabinet meeting on Sunday that Israeli soldiers were ready "for any activity that could take place".
"We are exacting a heavy price from Hamas and the terrorist organisations and the Israel Defense Forces are prepared for a significant expansion of the operation," he said.
Egyptian President Mohammed Mursi has said an Israeli ground invasion will have "serious repercussions", saying Egypt would never accept it "and neither will the free world".
The Arab League, which met in emergency session in Cairo, is sending a delegation of foreign ministers to Gaza on Tuesday.
Before the recent offensive, Israel had repeatedly carried out air strikes on Gaza as Palestinian militants fired rockets across the border.
But the aerial and naval bombardment is its most intense assault on the coastal territory since Israel launched a full-scale invasion four years ago.