Israeli air strikes killed 26 Palestinians, including eight children, in Gaza early on Sunday, Gaza health officials said, and rockets were fired into Israel as hostilities stretched into a seventh day.
The pre-dawn attacks in the centre of Gaza City brought the death toll in Gaza to 174, including 47 children, health officials said. Israel has reported 10 dead, including two children.
The United Nations Security Council was due to meet later on Sunday to discuss the worst outbreak of Israeli-Palestinian violence in years.
UN Secretary-General Antonio Guterres reminded all sides "that any indiscriminate targeting of civilian and media structures violates international law and must be avoided at all costs,” UN spokesman Stephane Dujarric said in a statement on Saturday.
Both Israel and Hamas, the Islamist group that runs the enclave, insisted they would continue their cross-border fire after Israel destroyed a 12-storey building in Gaza City that housed the US Associated Press and Qatar-based Al Jazeera media operations.
The Israel military said the al-Jala building was a legitimate military target, containing Hamas military offices, and that it had given advance warnings to civilians to get out of the building.
The AP condemned the attack, and asked Israel to put forward evidence. "We have had no indication Hamas was in the building or active in the building," it said in a statement.
In what Hamas called a reprisal for Israel's destruction of the al-Jala building, Hamas fired 120 rockets overnight, the Israeli military said, with many intercepted and around a dozen falling short and landing in Gaza.
Israelis dashed for bomb shelters as sirens warning of incoming rocket fire blared in Tel Aviv and the southern city of Beersheba. Around 10 people were injured while running for shelters, medics said.
In a burst of air strikes early on Sunday, the Israeli military said it struck the home of Yehya Al-Sinwar in the southern Gaza City of Khan Younis. Sinwar, who was released from an Israeli prison in 2011, heads the political and military wings of Hamas in Gaza.
Israel's security cabinet was due to meet later Sunday to discuss the hostilities. Prime Minister Benjamin Netanyahu said in a televised address late on Saturday that Israel was "still in the midst of this operation, it is still not over and this operation will continue as long as necessary".
Palestinians working to clear rubble from a building wrecked in Sunday's air strikes recovered the bodies of a woman and man.
"These are moments of horror that no one can describe. Like an earthquake hit the area," said Mahmoud Hmaid, a father of seven who has been helping with the rescue efforts.
Across the border in the Israeli city of Ashkelon, Zvi Daphna, a physician, whose neighborhood has been struck by several rockets, described a feeling of "fear and horror."