Israel said it killed 16 members of the Hamas armed wing in Gaza in a barrage today and Palestinian militants rained rockets into Israel as the United States said it would send an envoy to try to calm the most intense hostilities in years.
At least 56 people have been killed in Gaza since violence escalated on Monday, according to the enclave's health ministry. Six people have died in Israel, medical officials said.
Israeli Prime Minister Benjamin Netanyahu said the brigade commander for Gaza City was among senior members of the Islamist militant group who had been killed.
"This is just the beginning. We'll hit them like they've never dreamed possible," he added.
Soon after the announcement, a new rocket barrage was fired at the Israeli city of Ashdod and Israeli media said the military was preparing for new strikes on the Tel Aviv area.
Hamas confirmed the death of the commander and of "other leaders and holy warriors" in a statement.
Its leader Ismail Haniyeh added: "The confrontation with the enemy is open-ended."
A Palestinian source said truce efforts by Egypt, Qatar and the United Nations had made no progress to end violence that flared this week after tension during the Muslim fasting month of Ramadan and clashes in East Jerusalem.
Describing the scenes of destruction as "harrowing", US Secretary of State Antony Blinken said a senior aide, Hady Amr, would be sent to urge Israelis and Palestinians to seek calm.
Secretary of Defense Lloyd Austin reaffirmed "ironclad support for Israel's legitimate right to defend itself".
Russian Foreign Minister Sergei Lavrov called for an urgent meeting of the Middle East Quartet - Russia, the United States, the United Nations and the European Union - in order to halt violence.
Speaking alongside United Nations Secretary-General Antonio Guterres, Mr Lavrov said it would be best to organise such a meeting at the ministerial level.
Mr Guterres said the UN was "fully ready" to resume the work of the quartet and facilitate dialogue between the two sides.
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The UN Security Council held another emergency meeting on the crisis today.
Israeli Defence Minister Benny Gantz said his country would continue to strike Hamas to restore long-term calm.
The fighting is the heaviest between Israel and Hamas since a 2014 war in the Hamas-ruled enclave, and concern is growing that the situation could spiral out of control.
In Gaza, a multi-storey residential building and a tower housing Hamas and other media outlets collapsed after Israel warned occupants in advance to evacuate, and another structure was heavily damaged in the air strikes.
Other air strikes hit what Israel's military said were rocket launch sites, Hamas offices and homes of Hamas leaders.
"Israel has gone crazy," said a man on a Gaza street, where people ran out of their homes as explosions rocked buildings.
Twenty-four people were killed in Israeli air strikes on Gaza today, Gaza's health ministry said.
Witnesses and health officials in Gaza said one Israeli air strike killed three people, including a woman, in a car.
Many Israelis also spent a sleepless night as waves of rockets hit Israel's heartland.
"The children have escaped the coronavirus, and now a new trauma," an Israeli woman in the coastal city of Ashkelon told Channel 11 TV.
Israelis ran to shelters or lay on paths in some communities far from Gaza.
"All of Israel is under attack. It's a very scary situation to be in," said Margo Aronovic, a 26-year-old student, in Tel Aviv.
Along the Gaza border, an Israeli soldier was killed by an anti-tank missile, the military said. Two people were killed by a rocket in Lod, near Tel Aviv.
Tension also spilled over in mixed Arab-Jewish towns in Israel where there have been demonstrations over the hostilities. After a synagogue was torched in Lod, police deployed paramilitary reinforcements and announced a curfew.
US energy corporation Chevron said it had shut down the Tamar natural gas platform off the Israeli coast on the instructions of the Energy Ministry. Israel said its energy needs would continue to be met.
Hamas said it fired 210 rockets towards Beersheba in southern Israel and at Tel Aviv overnight in response to the strikes on a tower building in Gaza City.
"If they (Israel) want to escalate, the resistance is ready, if they want to stop, the resistance is ready," Mr Haniyeh said.
For Israel, the 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 during Ramadan, with clashes between Israeli police and Palestinian protesters near Al-Aqsa Mosque in East Jerusalem.
These escalated ahead of a court hearing - now postponed - that could lead to the eviction of Palestinian families from East Jerusalem homes claimed by Jewish settlers.
The conflict has led to the freezing of talks by Mr Netanyahu's opponents on forming a governing coalition to unseat him after Israel's inconclusive 23 March election.
Violence has also flared in the occupied West Bank.
Medical sources said a 16-year-old Palestinian was killed in clashes with Israeli forces today.
Gaza's health ministry said 14 of the people reported killed in the enclave were children.
The Israeli military said 200 of more than 1,000 rockets fired by Gaza factions had fallen short, potentially causing some Palestinian civilian casualties.
Israel has dispatched infantry and armour to reinforce tanks already gathered on the border, evoking memories of its last ground incursion into Gaza to stop rocket attacks in 2014.
Although the latest problems in Jerusalem were the immediate trigger for hostilities, Palestinians have also been frustrated as their aspirations for an independent state have suffered setbacks in recent years.
These include Washington's recognition of disputed Jerusalem as Israel's capital, a US plan to end the conflict that they saw as favourable to Israel, and continued settlement building.