Israel kept up its punishing raids on Gaza Monday but held off from a threatened ground incursion as the world intensified efforts to broker a truce.
With Israel's campaign to halt cross-border rocket fire entering its seventh day, the Arab League was to hold an emergency meeting to discuss moves to end "the shedding of Palestinian civilians' blood" and formulate a common Arab stance on the crisis.
And UN chief Ban Ki-moon called on Israel to scrap plans for a ground offensive, saying "too many" Palestinian civilians had been killed as the death toll from its punishing air campaign hit 172, with another 1,230 wounded.
The Gaza-based Palestinian Centre for Human Rights (PCHR) has said more than three-quarters of the victims were civilians.
But, despite preparations for a possible ground attack, Israel appeared to be holding off with media reports saying that ministers attending a Sunday evening meeting of the security cabinet had decided against putting boots on the ground -- for the time being.
During the night, Israeli warplanes struck more than 40 sites, killing two people, and artillery pounded the north where Israel warned residents to flee for their lives ahead of a major operation.
Over the past 24 hours, more than 17,000 Palestinians, most of them from northern Gaza, have packed into a handful of schools run by the UN agency for Palestinian refugees in a bid to seek some respite from the bombing.
Inside the New Gaza Boys School in Gaza City, every classroom was packed full of people, with blankets strung across doorways to provide some privacy.
"We feel safer here, but the situation is tough, there's very little food and water and nothing for the children to do," said 27-year-old Rehab, from Beit Lahiya.
"We're sleeping on the tiles of the classroom floor. "
Israeli Defence Minister Moshe Yaalon said that so far, the operation had caused "huge" damage to Hamas.
"When Hamas leaders come out of their hiding places, they will see the scale of destruction and damage we have caused them, which will cause them to regret ever beginning this round of fighting against Israel," he said in a statement.
A senior military official said the army was using a so-called "pain map," hitting targets seen as most valuable to Hamas.
"This will impair its abilities and force it into a difficult process, as long as possible, of post-war rehabilitation," he told reporters, speaking on condition of anonymity.
"The harder we hit them, the longer and more difficult the process, and more effective the deterrence."
With a growing number of Palestinian civilians among the dead, international efforts to end the bloodshed have taken on a renewed sense of urgency.
Palestinian president Mahmud Abbas has called for the United Nations to put the state of Palestine under "international protection" due to the worsening violence in Gaza, with the bid to be discussed at Monday's Arab League meeting in Cairo.
US Secretary of State John Kerry on Sunday reiterated Washington's willingness to help mediate a truce and has been talking to regional leaders, a senior State Department official said. Washington has no direct contacts with Hamas, so all efforts would likely be channelled through Qatar and Egypt.
Top diplomats from Germany and Italy were also due in the region to bolster truce efforts.
So far, no Israelis have been killed since the operation began on July 8, despite 777 rockets hitting Israel and more then 200 others intercepted, the army says.
Late on Sunday, a rocket fired from Syria hit the Israeli-occupied Golan Heights, and several hours later, two rockets fired from southern Lebanon struck northern Israel.
In both cases, there were no injuries but troops fired back at the source of fire, raising fears that the conflict in and around Gaza could spread.
Meanwhile, a Palestinian was shot dead in clashes with soldiers in the southern West Bank, his family said, with the army confirming troops had fired on people throwing stones and molotov cocktails.
Overnight, troops arrested 23 people, with the Ramallah-based Palestinian Prisoners Club saying 11 of them were Hamas MPs.
Saudi Arabia pledged $53.3 million to pay for medicine and medical equipment to treat the victims of the Gaza crisis, a minister announced late Sunday, saying the aid would be transferred through the Palestinian Red Crescent.