Israeli tanks, planes and ground forces continued to attack Gaza on Monday.
Defence Minister Ehud Barak said the offensive against Hamas would go on until Israel was safe.
Meanwhile, international efforts to secure a ceasefire moved ahead with French President Nicolas Sarkozy and Middle East special envoy Tony Blair visiting the region.
An EU delegation is also there, but Czech Foreign Minister Karel Schwarzenberg says it has no "specific plan for a ceasefire" to offer.
President George Bush says he would like to see a ceasefire in Gaza, but only under the condition that Hamas stops attacking Israel. He says Hamas is responsible for the current crisis.
The death toll in Gaza rose is at least 541 people since the offensive began on 27 December.
Civilian casulties are mounting in Gaza. Hospitals report streams of injured are coming to their already overcrowded facilities.
Gaza has a population of 1.5 million.
Claims over Hamas forces
The Israeli army says "many dozens" of Hamas fighters have been killed since ground troops invaded on Saturday.
Israel says the purpose of the operarion is to end rocket attacks by Hamas on southern Israel.
Hamas called off a six-month truce on 19 December and stepped up its its attacks.
It claims thousands of fighters are waiting "in every street, every alley and at every house" to fight the Israelis.
In a broadcast speech, military spokesman Abu Ubaida said Hamas will increase its rocket strikes on Israel if the attack continued.
Four Israelis have been killed by rockets since the offensive began. An Israeli soldier was killed in fighting on Sunday and 48 have been wounded since the invasion.
Talks in Egypt
Mr Sarkozy has met Egyptian President Hosni Mubarak and is to hold meetings in Israel and the Palestinian territories.
Israeli Foreign Minister Tzipi Livni has rebuffed European proposals for international observers in the Gaza Strip after any ceasefire, saying instead that teams are needed to help search and seal tunnels that could allow Hamas to rearm.
Israel is due to hold a general election on 10 February.