Israel sent a "large number" of ground troops backed by helicopters into the Gaza Strip on Saturday to take over rocket launching sites in the Hamas-run territory, officials said on Saturday.
"A short while ago IDF forces began to implement the second stage of Operation Cast Lead. Land forces have begun to maneuver within the Gaza Strip," said an army statement.
Israeli tanks opened fire on Hamas positions and Hamas forces replied with mortar fire, according to witnesses.
"The objective is to destroy the Hamas terror infrastructure in the area of operations," army spokeswoman Major Avital Leibovitch said.
Israeli tanks and troops had been massed on the border for days awaiting a possible invasion as Israeli firepower pounded Gaza from land, sea and air.
Witnesses had earlier reported Hamas fighters taking up positions in Gaza to repel any Israeli incursion.
Israeli officials had repeatedly warned they were prepared to step up military action if Hamas rocket attacks on southern Israel did not stop but Hamas kept up the action on Saturday.
Tens of thousands of reservists
Israel is calling up thousands of reservists to take part in its ground operation against Hamas in Gaza, Defense Minister Ehud Barak's office said on Saturday as troops moved into the enclave.
"Defense Minister Ehud Barak signed this evening an order urgently calling up thousands of reserve soldiers to take part in the fighting in Gaza," it said.
An Israeli army spokeswoman said that the reservists "will be going to the home front command and some to combat units."
Israeli ground forces crossed into Gaza on Saturday evening following seven days of massive air bombardments against Hamas targets across the Gaza Strip that killed at least 460 Palestinians.
According to the chief Israeli military spokesman, the ground incursion will take many days.
This won't be a school outing," Brigadier Avi Benayahu told Israel's Channel Two television. "We are taking about many long days."
Israel will pay 'high price'
Hamas's armed wing vowed that Israel would pay a "high price" for the ground operation it has launched on the Gaza Strip.
"The enemy will pay a high price for its operation in northern Gaza Strip," said a statement from Ezzedine Al-Qassam Brigades read out on the movement's Al-Aqsa television station.
A senior Hamas official said that Hamas fighters had killed a number of Israeli soldiers in eastern Gaza.
Mohammad Nazzal, who is based in Damascus, reported the deaths on Al Arabiya television without giving exact figures.
Strike on mosque
An Israeli air strike earlier on Saturday evening killed 11 Palestinian worshippers, including children, and wounded dozens as in a mosque in Beit Lahiya, Hamas officials and medics said.
Israel has targeted mosques previously saying that Hamas had used them as command posts and fire bases.
The mosque raid brought the Palestinian death toll to at least 446, with about 2,050 wounded, in the worst sustained bloodshed in decades of the conflict between Israel and the Palestinians.
Four Israelis have also been killed in the cross-border rocket attacks by Hamas and other militant groups.
One Israeli strike killed Abu Zakaria al-Jamal, a senior commander of Hamas's armed wing, Hamas said. He was the second Hamas leader killed in three days.
Israel launched the campaign, called Operation Cast Lead, on Dec. 27 saying it wanted to stop the rocket attacks.
But about 30 Hamas rockets smashed into Israel on Saturday, the military said. Two people were hurt by shrapnel when a rocket hit a building in the port city of Ashdod.