Israel has pounded Gaza with rockets, destroying the headquarters of Hamas, while Palestinian rockets are reported to have been intercepted en route to Tel Aviv. Among the buildings believed to have been destroyed is the office of Prime Minister Ismail Haniya.
Israel is acting in retaliation for the 16 November attack on Jerusalem by keeping nearly 75,000 reservists on standby and deploying numerous tanks and armoured vehicles. As Israel attacked, there were reports of sirens and explosions in the Israeli capital of Tel Aviv
For the first time in decades, Jerusalem was targeted by a Palestinian rocket. Tel Aviv is also under attack while the Israeli Defence Forces (IDF) continues its air attack on Gaza.
The Islamic militant group Hamas, which controls the Gaza region, has claimed responsibility for the attack on both Tel Aviv and Jerusalem. Israeli media said two rockets had landed on the outskirts of Jerusalem but no casualties have been reported so far.
The interior ministry of the Hamas government in Gaza was also under fierce attack, reports said. "We are going to significantly aggravate the operation," said an Israeli official, according to Ynetnews.
Not less than 28 Palestinians and three Israelis have lost their lives so far since the conflict began after Hamas military chief Ahmed al-Jaabari was killed by Israel in a pinpoint attack.
IDF said 97 rockets which were fired from Gaza had struck Israel on 16 November alone and 99 more rockets were intercepted by Israel's anti-missile system.
Israeli Prime Minister Benjamin Netanyahu said his country is "prepared to broaden the action inside Gaza".
Hamas is bracing for the onslaught with its spokesperson Sami Abu Zuhri saying: "The Israelis should be aware of the grave results of such a raid, and they should bring their body bags."
Meanwhile the US has maintained its support to Israel saying the state has the "right to defend itself."
The White House said in a statement that President Barack Obama "reiterated US support for Israel's right to defend itself, and expressed regret over the loss of Israeli and Palestinian civilian lives," after his telephone conversation with Netanyahu.
The statement added: "The prime minister [Benjamin Netanyahu] expressed his deep appreciation to the president and the American people for the United States' investment in the Iron Dome rocket and mortar defence system, which has effectively defeated hundreds of incoming rockets from Gaza."