At least 40 Palestinians were killed on Sunday by Israeli shelling in a Gaza neighbourhood, where bodies were strewn in the street and thousands fled towards a hospital packed with wounded, witnesses and health officials said.
The mass casualties in the Shejaia district in northeast Gaza were the heaviest since Israel launched its offensive on the Palestinian territory on July 8 after cross-border rocket strikes by militants intensified.
Anguished cries of "Did you see Ahmed?" "Did you see my wife?" echoed through the courtyard of Gaza's Shifa hospital, where panicked residents of Shejaia gathered in family groups while inside bodies and wounded lay on blood-stained floors.
Video footage given to Reuters by a local showed at least a dozen mangled corpses, including three children, lying in the rubble-filled streets.
At the hospital, about 3 kilometres away, elderly men said the Israeli attack was the fiercest they had seen since the 1967 Middle East war, when Israel captured Gaza.
"Forty martyrs have been counted so far ... medics are searching for possibly more casualties," Naser Tattar, Shifa hospital's director, told Reuters. He said some 400 people were wounded in the Israeli attack.
Two Israeli soldiers died in the Gaza fighting late Saturday and early Sunday morning,
Meanwhile, Palestinian militants kept up their rocket fire on Israel. Sirens sounded in southern Israeli towns and in the Tel Aviv area but there were no reports of casualties.
Thousands fled Shejaia, some by foot and others piling into the backs of trucks and sitting on the hoods of cars filled with families trying to get away.
Asked about the attack, an Israeli military spokeswoman said: "Two days ago, residents of Shejaia received recorded messages to evacuate the area in order to protect their lives."
Hamas, the dominant armed group in the Gaza Strip, had urged people across the territory not to heed the Israeli warnings and abandon their homes.
As the tank shells began to land, Shejaia residents called radio stations pleading for evacuation. An air strike on the Shejaia home of Khalil al-Hayya, a senior Hamas official, killed his son, daughter-in-law and two grandchildren, hospital officials said.
Palestinian President Mahmoud Abbas condemned "the new massacre committed by the Israeli government in Shejaia", a spokesman for the Western-backed leader said.
Israel, which has accused Hamas of using civilians as human shields by launching rockets from residential areas, sent ground forces into the Gaza Strip on Thursday after 10 days of air, naval and artillery barrages failed to stop the salvoes.
The military said it beefed up its presence on Sunday, with a focus on destroying missile stockpiles and a vast tunnel system Hamas built along the frontier that crosses into Israel.
Israel says more than 1,700 rockets have been fired out of Gaza during this month's fighting, and between 3,000 and 4,000 destroyed in military strikes.
Hamas says it is continuously replenishing its stock of weapons and is ready for a prolonged conflict.
The United Nations Works and Relief Agency said more than 63,000 people have now sought sanctuary in 55 of its shelters, mostly schools, in Gaza.
The heavy fighting came as UN chief Ban Ki-moon headed to Qatar to try to push stalled cease-fire efforts forward. The UN Secretary General was to meet Abbas in Doha, a senior Qatari source told Reuters. Ban was due during the week to travel to Kuwait, Egypt, Israel, the Palestinian Territories and Jordan, a UN statement said.
The Qatari source said Abbas was also due to meet Hamas leader Khaled Meshaal.
Hamas last week rejected an Egyptian call on both sides to halt hostilities, saying it first wants guarantees that Israel and Egypt will significantly ease their border blockade of Gaza, which has been ruled by the Islamic militant group since 2007.
Egypt said on Saturday it had no plans to revise its ceasefire proposal. A Hamas source in Doha said the group has no plans to change its conditions for a ceasefire.