The conflict escalated relentlessly throughout the day, and Israel vowed that its strikes would only increase.
The latest exchange of fire was sparked by weeks of tensions in contested Jerusalem.
Since sundown on Monday, 26 Palestinians – including nine children and a woman – were killed in Gaza, most by air strikes, Gaza health officials said.
The Israeli military said at least 16 of the dead were militants. During the same period, Gaza militants fired hundreds of rockets towards Israel, killing two Israeli civilians and wounding 10 others.
But Israeli Prime Minister Benjamin Netanyahu warned in the evening that more was coming.
He said after meeting with senior defence officials that Israel would “increase even more the strength of the strikes and also the rate of the strikes” against Hamas and Islamic Jihad militants in the Gaza Strip.
“Hamas will receive blows now that it didn’t expect,” he said in a statement.
In a further sign of rising tensions, Israel signalled it is widening its military campaign.
The military said it is sending troop reinforcements to the Gaza border and the defence minister ordered the mobilisation of 5,000 reserve soldiers.
Even as the two sides ramped up tensions, officials said Egypt was working on brokering a ceasefire.
The overnight rockets and air strikes were preceded by hours of clashes between Palestinians and Israeli security forces, including confrontations at Jerusalem’s Al-Aqsa Mosque compound, a sacred site to both Jews and Muslims.
The current violence, like previous rounds, including the last intifada, or uprising, has been fuelled by conflicting claims over Jerusalem, which is at the emotional core of the sides’ long conflict.
In a sign of widening unrest, hundreds of residents of Arab communities across Israel staged overnight demonstrations, denouncing the recent actions of Israeli security forces against Palestinians.
It was one of the largest protests by Palestinian citizens in Israel in recent years.
Israel and Hamas, an Islamic militant group that seeks Israel’s destruction, have fought three wars and numerous skirmishes since Hamas seized control of Gaza in 2007.
Recent rounds of fighting have usually ended after a few days, often helped by behind-the-scenes mediation by Qatar, Egypt and others.
An Egyptian official confirmed that the country was trying to broker a truce. But the official said Israeli actions in Jerusalem had complicated those efforts.
A Palestinian security official confirmed the ceasefire efforts.
Israel carried out dozens of air strikes, including two that targeted high-rise buildings where militants were believed to be hiding.
At midday, an air strike hit an apartment building in central Gaza City. Local media said an unknown number of militants had been killed.
But the force of the blast sent terrified residents, including women and children who were barefoot, running into the streets.
An earlier air strike struck a high-rise elsewhere in Gaza City as people were conducting dawn prayers, residents said. Health officials said two men and a woman were killed.
The woman’s 19-year-old disabled son was among the dead, residents said.
Ashraf al-Kidra, spokesman for the Gaza Health Ministry, said a total of 26 people, including nine children and the woman, were killed and 122 people were wounded.
He said Israel’s “relentless assault” was overwhelming the healthcare system, which has been struggling with a Covid outbreak.
Additional reporting by the Associated Press.
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