The Israeli military pledged to operate "significantly" in coming days, a day after Defence Minister Yoav Gallant said "Now is a time for war".
Much of the population is descended from refugees who fled or were expelled from homes in Israel at its founding in 1948.
"Today Israel is repeating this before the eyes of the world," Gaza analyst Talal Okal told Reuters.
Israel says the horrific attack on its civilians means it must annihilate the militant group and others must get out of the way.
The military wing of Hamas said the latest air strikes had killed 13 among scores of people it captured from Israel and that it had fired 150 rockets at Israel in response.
The U.N. Palestinian refugee agency (UNRWA) said it had moved its central operations centre and international staff to Gaza's south and urged Israel to spare its shelters.
Gazans have suffered economic collapse and repeated Israeli bombardment under a blockade since Hamas seized power there 16 years ago. »