Israeli air raids have pounded the Gaza Strip for a third day, hitting key sites linked to militant group Hamas.
Gaza's interior ministry and Islamic University were the latest targets.
Hamas says 300 Palestinians have died since Saturday, while the UN says 56 civilians are dead. In Israel, a second person was killed by a militant rocket.
Defence Minister Ehud Barak said Israel was not fighting the people of Gaza but was in "a war to the bitter end" with Hamas, which has ruled it since 2007.
Israel has massed forces along the border and has declared the area around the narrow coastal strip a "closed military zone".
Correspondents say the move - in addition to the call-up of thousands of reservists - could be a prelude to ground operations, but could also be intended to build pressure on Hamas.
BBC analyst Jonathan Marcus says the 6,500 reservists called up would be insufficient for a knock-out blow against Hamas, which would require nothing less than the re-occupation of the Gaza Strip.
Dozens of centres of Hamas strength, including security compounds, government offices and tunnels into Egypt, have been hit since Israel started its massive bombing campaign on Saturday morning.
As dawn broke on Monday, witnesses said a powerful explosion struck the interior ministry.
Earlier, a raid destroyed a science building at the Islamic University in Gaza - a centre of support for the Islamist militant group that controls the narrow coastal strip. Many top Hamas officials graduated from there.
Also hit was a house near the abandoned home of a senior Hamas leader in the southern town of Rafah.
The UN relief agency in Gaza says 56 civilians have been killed by Israeli fire so far, the latest being five girls who died in Jabaliya refugee camp when Israeli forces bombed a mosque near their home.
The head of the emergency services in the Hamas-run coastal strip said that 312 Palestinians had been killed in all, and more than 1,400 others wounded.
The latest fatality in Israel was reported to be a labourer at a building site in the city of Ashkelon, that was hit by a medium-range Grad missile. Three people were reported seriously wounded.
A Palestinian doctor in Gaza has told the BBC nearly all the casualties he had seen overnight and on Monday had been civilians.
He said the hospital where he worked had converted ordinary rooms into intensive care units to cope with the number of wounded and essential medical supplies were running out.
Israelis in nearby towns have faced an escalated militant rocket threat
At the UN, the Security Council joined international calls for restraint by urging an end to all violence between Israel and Gaza.
The US, Israel's strongest ally on the council, said the onus was on Hamas to stop rocket fire first and commit itself to a
Israel says Palestinian militants have fired more than 110 rockets from the coast territory since Saturday.
The strikes began on Saturday less than a week after the expiry of a six-month-long ceasefire deal with Hamas.
Mr Barak told a special parliamentary session that Israel was "taking all precautions" to avoid harming Palestinian civilians, but blamed militants for intentionally hiding in the civilian population.
His statement and Foreign Minister Tzipi Livni's statement on Sunday about "changing realities on the ground" in Gaza have fuelled speculation of a sustained Israeli bombing campaign.
Analysts said Saturday was the single deadliest day in Gaza since Israel's occupation of the territory in 1967, although no independent confirmation is available of the numbers killed.
The violence began days after a six-month truce expired between Israel and Hamas, and as Israel was preparing for a general election in February.
The exiled leader of Hamas, Khaled Meshaal, has called for a new intifada, or uprising, against Israel, while the movement's Gaza leader, Ismail Haniya, called the attack an "ugly massacre".
Attacks over the Gaza-Israel border regularly put the truce under strain with both sides blaming each other for unprovoked violations.
From 1967 Israel's military occupied the Gaza Strip and Jewish settlers built communities within the territory. Israel withdrew in 2005 but has kept tight control over access in and out of Gaza and its airspace.