Hamas's main security complex has now been destroyed and Israeli tanks are poised on the edge of the Gaza Strip, prepared for a possible invasion of the impoverished enclave where 1.5 million Palestinians live.
In retaliation, militants fired some 80 rockets into Israel, emergency services said. In one of the deepest attacks, two rockets struck near Ashdod, a main port some 18 miles from Gaza, causing no casualties, police said.
Around 700 people were wounded on Saturday when Israeli warplanes mounted about 100 strikes which destroyed all of Hamas's security compounds. Hamas estimated at least 180 members of its security forces were killed, including police chief Tawfiq Jabber. At least 15 women and children died in the strikes as well as seven teenagers killed as they waited for a bus to take them home from school.
The UN Security Council has called for an immediate halt to all violence in the region but Israel has warned operations will continue until mortar attacks from Gaza cease. But Mark Regev, a spokesman for Israeli Prime Minister Ehud Olmert, said: "Israel will continue (the campaign) until we have a new security environment in the south, when the population there will not longer live in terror and in fear of constant rocket barrages."
Ismail Haniyeh, the leader of Hamas which has controlled the coastal territory since June 2997, said: "Palestine has never seen an uglier massacre." He vowed revenge including suicide bombings in Israel's "cafes and streets".
Mr Barak said: "There is a time for calm and a time for fighting, and now the time has come to fight." He later ruled out any new truce with Hamas.
