At least 11 people have been killed by a strike on a home in Gaza, in the deadliest incident of Israel's offensive against Hamas militants.
The airstrike targeted the home of the Dalou family in Gaza City's Nasser district, reducing it to rubble.
Gaza health official Ashraf al-Kidra said five women, including one 80-year-old, and four small children were among the dead.
Frantic rescuers pulled the children's bodies from the ruins of the house as survivors and bystanders screamed in grief. Later, the bodies of the children were laid out in the morgue of Gaza City's Shifa Hospital.
As Israel expanded its operation to target the homes of suspected militants, The Israeli Defence Forces (IDF) said the target of the attack was a top rocket mastermind of the Islamic Jihad militant group.
"The massacre of the Dalou family will not pass without punishment," Hamas's armed wing said in a statement.
Following the incident, Palestinian Authority President Mahmoud Abbas called for an intensification of peaceful protests against Israel, the AFP news agency reported.
Meanwhile, Gaza militants continued their barrage of rocket fire into Israel, firing more than two dozen on Sunday.
This included two longer-distance rockets that targeted Tel Aviv for a fourth straight day, but they were intercepted by Israel's Iron Dome defence system.
One person was hurt by falling debris from one of the rockets that was intercepted south of the city.
Health officials say 66 Palestinians have been killed since the operation began on Wednesday, including 32 civilians. More than 400 people have been wounded in the strikes.
On the Israeli side, three civilians have been killed and more than 50 wounded by rocket fire.
Israeli Prime Minister Benjamin Netanyahu has said the country is ready to "significantly expand" its Gaza offensive.
"We are extracting a heavy price from Hamas and the terror organisations," Mr Netanyahu said at the start of the weekly cabinet meeting on the fifth day of the conflict.
"The soldiers are ready for any activity that could take place."
On Friday, ministers doubled the current reserve troop quota set for the offensive to 75,000 in preparation for a possible ground invasion.
Some 30,000 soldiers have already been called up .
Israeli President Shimon Peres told Sky's Murnaghan programme that he does not see a ground invasion as an escalation of the conflict.
"What we are doing is self defence," he said.
"What would you do in London if you would have 900 missiles aimed at your schools, at your homes, at your houses? Would you call it an escalation if you tried to stop it?
"We don't have any purpose to control Gaza or to go into Gaza.
"Basically our purpose is peace, their purpose is to destroy Israel. It is not an easy situation."
Foreign Secretary William Hague told Sky News Murnaghan that Britain has warned Israel against a ground invasion.
"The Prime Minister and I have both stressed to our Israeli counterparts that a ground invasion of Gaza would lose Israel a lot of the international support and sympathy they have in this situation,” he said.
"A ground invasion is much more difficult for the international community to sympathise with or support, including the United Kingdom."
But Mr Hague blamed Hamas for sparking the current conflict in Gaza.
"We call on Hamas again to stop the rocket attacks on Israel, it is Hamas that bears principal responsibility for starting all of this and we would like to see an agreed ceasefire - an essential component of which is an end to those rocket attacks."
US President Barack Obama said it was "preferable" for the crisis to end without a "ramping up" of Israeli military activity, but he blamed Hamas militants for causing the showdown.
"Israel has every right to expect that it does not have missiles fired into its territory," Mr Obama said, in Thailand.
Israel's bombardment of Gaza entered a new phase overnight, with the military shelling the Palestinian territory from the sea, and targeting the homes of suspected militants.
Earlier on Sunday, five Palestinian civilians were killed in airstrikes, including four children ranging in age from one to seven, according to Ashraf al-Kidra, a Gaza health official.
A Palestinian official told AFP that a truce was possible "today or tomorrow", after Egypt's President suggested that there could be a ceasefire soon.
Mohamed Morsi said: "There are now intensive efforts through communication channels with the Palestinian side and with the Israeli side and there are now some indications that there is possibility of a ceasefire soon between the two sides."
Israel has said it is not prepared to enter into a truce without guarantees the rocket fire will stop.
The latest Israeli strikes also hit two Gaza media centres housing the offices of Al Quds TV and Al Aqsa, both seen as sympathetic to Hamas, along with foreign journalists including a Sky News team.
Israel unleashed its massive air campaign on Wednesday, killing a leading militant of the Hamas Islamist group that controls Gaza and rejects Israel's existence.
Israel says it is trying to stop militants in the coastal enclave from launching rockets that have plagued its southern communities for years.
More than 500 rockets fired from Gaza have hit Israel since the recent violence flared on Wednesday.
The Jewish state has launched more than 950 air strikes since then.