Israel has killed several Hamas commanders and blew up a 14-floor high-rise in the Gaza Strip as the country stepped up its military campaign.
"This was only the beginning. We will inflict blows on them that they have never dreamed of," Israeli Prime Minister Benjamin Netanyahu said on Wednesday, DPA news agency reported.
Later on Wednesday, the local media reported the government was planning to intensify its military operations targeting the Hamas-ruled Gaza Strip following a security cabinet meeting.
Dozens have died in the latest flare-up of violence - most of them in Gaza - which has put Hamas and Israel on the brink on all-out war.
As Israeli armed forces pounded Gaza with airstrikes, militants in the Palestinian territory carried on firing massive barrages of rockets toward Israel, where air raid sirens sounded and locals scrambled for cover.
On Wednesday evening, a rocket attack on the Israeli city of Sderot left one person in critical condition and five others with less severe injuries, rescue services said.
Israeli media reported the that the person with severe injuries was a six-year-old child who died later in the evening. There were conflicting reports on the age of the child.
The military reported its first death in three days of fighting. A 21-year-old Israeli soldier was hit by anti-tank missile fire originating from Gaza.
Seven people in Israel have now died.
The 14-floor building in Gaza hit by Israeli planes on Wednesday was the third high-rise destroyed since the escalation of violence. Islamist Hamas and Islamic Jihad militants both were said to have had offices in the building, which also housed shops and cafes. Videos showed the building collapsing after the attack.
Israel has struck a range of targets in the Gaza Strip as part of its airstrike response to the more than 1,000 rockets Palestinian militants have launched towards its territory since Monday.
The Health Ministry in the Hamas-run Gaza Strip said at least 56 Palestinians have been killed, including 15 children, while over 300 were reported injured.
The Israeli army said that members of the Islamist Hamas and Islamic Jihad militant organizations were killed, including senior officials.
Israeli airstrikes have destroyed all police buildings in the Gaza Strip, a spokesperson for the Hamas-led Interior Ministry said.
Israel's air raid warning sirens sounded once again on Wednesday in Tel Aviv, where Israel's main international airport had halted flights and many schools were closed.
US President Joe Biden "condemned the rocket attacks by Hamas and other terrorist groups, including against Jerusalem and Tel Aviv" during a phone call with Netanyahu, the White House said late on Wednesday.
Biden "conveyed his unwavering support for Israel's security and for Israel's legitimate right to defend itself and its people, while protecting civilians," the White House said.
The US president also encouraged "a pathway toward restoring a sustainable calm," and updated Netanyahu on Washington's diplomatic engagement with regional powers as well as Palestinian officials.
The UN Security Council met on Wednesday but the US blocked a statement. The meeting following a briefing by UN Special coordinator for the Middle East Peace Process Tor Wennesland.
"We're escalating towards a full-scale war," Wennesland tweeted. "Leaders on all sides have to take the responsibility of de-escalation. The cost of war in Gaza is devastating and is being paid by ordinary people."
UN Secretary General Antonio Guterres and Russian Foreign Minister Sergei Lavrov called for a meeting of the Middle East Quartet.
The European Union's top diplomat, Josep Borrell, called for an end to conflict.
"The grave escalation in Israel and the Occupied Palestinian Territory, including the major upsurge in violence in and around Gaza, must stop," he said in statement, adding that he was "dismayed" by the civilian deaths.
The cross-border attacks between Israel and the Palestinians also spilled into the streets of Israel's cities, with Netanyahu saying on Wednesday night he was heading to an emergency meeting to hand the police additional powers and forces.
"I also intend to bring in military forces according to the existing law and we will pass an additional law if necessary," Netanyahu said in comments posted on Twitter as he called violence in Israel's cities "unacceptable."
"Nothing justifies the lynching of Jews by Arabs and nothing justifies the lynching of Arabs by Jews," he said.
Israeli television had previously reported that Netanyahu wanted to deploy soldiers to Israeli cities to restore calm but that Defence Minister Benny Gantz had declined to do so.
There were ugly confrontations between Jewish and Arab Israelis in several Israeli communities on Wednesday evening, including riots in Lod, 15 km south-east of Tel Aviv, despite a curfew.
Israeli media reported a police vehicle in the town south-east of Tel Aviv being set on fire and Arab protesters critically injuring a Jewish resident in Akko, in the north of the country.
In Bat Jam, south of Tel Aviv, ultra-right Jews reportedly attacked Arab businesses and one Arab resident was brutally attacked with clubs, according to broadcasters.
In the city of Haifa, Jewish protesters threw stones at an Arab motorist, who then hit and injured one of the attackers, according to the Times of Israel.
In Tiberias, according to police, an Arab driver was attacked with stones by Jewish protesters and was injured.
Israeli President Reuven Rivlin strongly condemned the riots as a "brutal attack on coexistence in the state of Israel."
The Arab minority in Israel makes up about 20 per cent of the population of 9 million. They face discrimination, and right-wing politicians often portray them as enemies of the Jewish state.
The airstrikes and rocket attacks followed violent clashes in recent days at the Jerusalem holy site known as the Temple Mount to Jews and the Noble Sanctuary to Muslims.
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