Israeli F-16 bombers have carried out a series of air strikes against targets in the Gaza Strip, killing 225 people.
Gaza officials and Hamas said about 700 others were wounded as missiles hit security compounds and fighter bases on Saturday morning. More air raids were launched as night fell.
The BBC reports the strikes were the most intense Israeli attacks on Gaza for decades. A truce with Hamas expired on 19 December.
Israel said it was responding to an escalation in rocket attacks from Gaza the operation would go on "as long as necessary".
Rockets are frequently fired against Israeli towns from inside the Gaza Strip; large numbers of rocket and mortar shells had been fired at Israel in recent days.
Hamas blamed Israel for the end of the ceasefire, saying it had not respected its terms, including the lifting of a blockade under which little more than humanitarian aid has been allowed into Gaza.
The BBC reports the blockade has in place since Hamas took control of Gaza in June 2007. Israel says it is needed to isolate Hamas and stop rockets being fired across the border at Israeli towns.
Both sides say they are ready to stage wider assaults and a senior Israeli military source says ground troops may be used.
Hamashas called for a new Palestinian uprising against Israel. It earlier warned that it would retaliate by resuming suicide bombings.
Call for halt by UN
UN Secretary-General Ban Ki-moon called on Saturday for an immediate halt to the bombings and the rocket attacks.
In a statement on the UN website, Mr Ban said that "while recognizing Israel's security concerns regarding the continued firing of rockets from Gaza," he condemned Israel's "excessive use of force leading to the killing and injuring of civilians."
The European Union and its current president, France, have urged both sides to stop fighting, as did Britain and Russia.
The United States is holding Hamas responsible for the Israeli attacks.
American Secretary of State Condoleezza Rice blames Hamas and says the cease-fire should be restored immediately.
The United States regards Hamas as a terrorist organization.
Saudi Arabia urged the United States on Saturday to intervene to end Israel's attack on Gaza. King Abdallah said the attack was a continuation of "Israeli policies of occupation and mistreatment of Palestinians".
King Abdullah of Jordan also condemned the Israeli raids on Saturday, saying they would only inflame regional tensions.
The Arab League is to hold an extraordinary summit in Doha on 2 January to discuss the attacks. Arab foreign ministers will meet on Wednesday, ahead of the summit.