Israeli shelling killed four Palestinian boys on a Gaza beach on Wednesday, an incident the military called tragic, and Israel and Hamas said they would cease attacks for five hours on Thursday for a humanitarian truce requested by the United Nations.
Palestinian militants fired more than 130 rockets into Israel on the ninth day of a war in which Israeli attacks have killed 230 Palestinians, including six in two air strikes on Wednesday. Most of the casualties were civilians, health officials in Gaza said.
In Israel, a civilian has been killed by one of more than 1,000 Palestinian rockets fired and more than half a dozen people have been wounded.
With no end to the fighting in sight, Israel is poised to expand its war on Hamas militants, from shelling and aerial and naval assaults thus far into possible ground action, with around 30,000 reservists called up since the offensive began.
"The direction now is to continue air strikes and, if need be, enter with ground forces in a tactical, measured manner," an Israeli official said on Wednesday after an overnight session of Prime Minister Benjamin Netanyahu's security cabinet.
Netanyahu told mayors of rocket-struck towns: "We will continue to conduct this campaign until its goal is achieved. We will use as much force as necessary to restore quiet to Israel's residents."
But Israel agreed to a televised appeal from the U.N. Middle East peace envoy Robert Serry for a "humanitarian pause" to give Palestinians in Gaza a chance to buy food and get medical attention.
The United Nations' emergency relief coordinator, Valerie Amos, said in a statement she was "extremely concerned about the escalation of hostilities in Gaza and its impact on civilians."
She said in addition to the casualties, public services in Gaza had been suspended and its water supply was at risk.
The Israeli military said it would "cease operational activity" for five hours beginning at 10 a.m. (0700 GMT) on Thursday to permit Gazans to attend to humanitarian needs, but would respond "firmly and decisively" if Islamist Hamas militants launched attacks against Israel during that time.
Hamas spokesman Sami Abu Zuhri said the "militant factions accepted the offer by the United Nations for calm in the field for five hours between 10:00 a.m. and 15:00 on Thursday, for humanitarian needs."
In one of the worst single incidents of the conflict, an Israeli gunboat off Gaza's Mediterranean coast shelled a beach, killing four boys - two aged 10 and the others 9 and 11 - from one family and critically wounding another youngster, witnesses and Ashraf al-Qidra of the Gaza Health Ministry said.
The Israeli military said the reported civilian casualties were unintended and "tragic" and it was investigating what happened. "Based on preliminary results, the target of this strike was Hamas terrorist operatives," it said in a statement.
Netanyahu says Israel's armed forces try to avoid civilian casualties but that militant rocket crews put noncombatants at risk by operating in crowded residential areas.
President Barack Obama said the United States supported Egyptian efforts to bring about a ceasefire. U.S. officials would use their diplomatic resources over the next 24 hours to pursue closing a deal, he told reporters at the White House.
"We've all been heartbroken by the violence, especially the death and injury of so many innocent civilians in Gaza - men, women and children who were caught in the crossfire," Obama said. "The Israeli people and the Palestinian people don't want to live like this. They deserve to live in peace and security, free from fear."
Circulated photo on social media networks of Gaza beach attack
Chased By Shells
Ahmed Abu Hassera, who witnessed the incident at the shore, told Reuters: "The kids were playing on the beach. They were all ... under the age of 15."
"When the first shell hit land, they ran away but another shell hit them all," said Abu Hassera, whose shirt was stained with blood. "It looked as if the shells were chasing them."
Israeli shelling has frequently targeted Gaza beaches, which Israel claims suspects are staging areas for militants.
Earlier, Hamas's Abu Zuhri told reporters in Gaza: "These crimes will not succeed to break our will. We will continue the confrontation and resistance and we promise (Israel) will pay the price for all these crimes."
Six other Palestinians including four members of one family, among them a 70-year-old woman and two children aged 4 and 6, were killed in two Israeli air strikes in the southern Gaza city of Khan Younis, medics said.
Israel urged the evacuation of several districts in the Gaza Strip where more than 100,000 people live, threatening a ground offensive.
On the diplomatic front, the Hamas political leadership of Gaza formally rejected Cairo's ceasefire plan a day after its armed wing spurned it. Militants kept up rocket salvoes at Israel, which held its fire for six hours on Tuesday.
But despite the collapse of Egypt's truce efforts, there were signs of efforts still under way to nail down a ceasefire.
Palestinian President Mahmoud Abbas discussed Egypt's plan in Cairo on Wednesday with senior Hamas official Moussa Abu Marzouk, Egyptian and Palestinian news agencies said.
In Washington, Secretary of State John Kerry said the United States was doing "everything in our power" to achieve a truce.
Gaza health officials say most of the Palestinians killed in the worst flare-up of violence with Israel in two years have been civilians. Gaza's Al-Mezan Center for Human rights said 259 houses had been demolished by Israeli air strikes and 1,034 damaged, along with 34 mosques and four hospitals.
Israelis Race To Shelters
The rocket volleys from Gaza have made a race to shelters a daily routine for hundreds of thousands in the Jewish state. One Israeli has been killed in the rocket fire. Most of the Palestinian projectiles have crashed on open ground or been intercepted by Israel's Iron Dome anti-missile shield.
The military said Iron Dome shot down 82 of 132 rockets launched at Israel on Wednesday, while the others struck without causing casualties. One salvo, at coastal Ashkelon, forced visiting Norwegian Foreign Minister Boerge Brende into a shelter.
Authorised by Netanyahu's security cabinet to escalate the offensive, the military relayed warnings to inhabitants in northern Gaza with dropped leaflets and mass phone calls.
But in the Shejaia and Zeitoun districts, bastions of popular support for Hamas and the Islamic Jihad faction, there was no sign residents were heeding the Israeli call to leave.
"Failure to comply will endanger your lives and the lives of your family," said a recorded message received by residents of districts, which sprawl out to the sandy, barbed-wire border with Israel.
Maher Abu Saa'ed, a 45-year-old doctor in Zeitoun, said that with many areas of Gaza under attack, nowhere was safe and he would not leave despite the telephoned Israeli warning.
"To ask hundreds of people to leave their houses and go to the centre of the city is insane, a sick joke," he said.
Announcing Hamas's formal rejection of Egypt's ceasefire plan, Abu Zuhri said the outcome of deliberations within the Islamist movement "was to reject the proposal and, therefore, Hamas informed Egypt last night it apologises for not accepting it."
Hamas leaders have said any Gaza ceasefire must include an end to Israel's blockade of the territory, recommitment to a truce reached after an eight-day war there in 2012 and the release of hundreds of its activists arrested in the occupied West Bank while Israel hunted for three abducted Jewish seminary students last month.
The three teens were later found dead, and a Palestinian youth was later murdered in what appeared a revenge attack by Israelis. Those killings led to the current bout of hostilities.
Asked what he was doing about the crisis in Gaza, Kerry said: "Our concern is to have a legitimate ceasefire and to see if we can find a way to stop the conflict and killing so that we can get to the real issues that are underlying it. We're doing everything in our power."
The latest round of U.S.-brokered talks to settle the six-decade-old Israeli-Palestinian conflict collapsed in April.