The death toll of Palestinians killed in Israel's nine-day assault on the Gaza Strip hit 500 with thousands injured as Israeli troops advanced in their ground invasion supported by military helicopters that sporadically dropped bombs and caused mass panic as frantic families fled by car or on foot.
Since the ground invasion began at least 40 Palestinians have been killed and one Israeli soldier killed with some 35 injured, according to both Palestinian and Israeli officials.
Israel's assault worsened as world outrage continued, the U.N. Security Council failed to agree on a solution, the Islamist group Hamas called for national dialogue and Israel's President Shimon Perez rejected calls for a ceasefire.
Israel launched a ground invasion late on Saturday, pouring tanks and troops into the Hamas-controlled territory after a week of air strikes, prompting many residents to flee their homes.
Streets remained deserted in Gaza City, capital of the battered and densely populated Palestinian territory, as it was encircled by Israeli forces cutting off the main access roads.
Stores were shuttered and long queues formed outside the few open bakeries, with those residents who decided to stay stocking up on goods for fear of a protracted conflict.
The first night of Israel's ground invasion of Gaza that has been blasted with explosives from both air and sea was sleepless for most of the city's population as the sounds of war shattered the chilly night air.
Artillery shells rained down along the border, tanks firing in support of advancing infantry units in the northern Gaza Strip, and Hamas retaliated with mortar rounds and by setting off roadside bombs.
Residents who have bore the brunt of the assault decried their situation: "My children are panicked because of the intensity of the bombardments that went on all the night," Samir Haji, 46, told AFP.
The morning brought only more worry for many in Haji's neighborhood south of Gaza City as tanks rumbled into the area accompanied by Israeli infantry.
Dozens of tanks and heavy bulldozers rolled into the area near the former Jewish settlement of Netzarim, with air support from Apache helicopter gunships.
"We are shaking like our children," said Yehia Anis Hussein. "Even before this offensive, it was the blockade that was killing us. This is intolerable."
Dozens of frantic families fled the area in cars. Some were also seen walking down roads, heading south and away from the advancing troops.
Battle on airwaves
As troops clashed with Hamas forces on the ground, another battle raged on the airwaves, with Israel breaking into Hamas television and radio broadcasts.
"Hamas leadership, your time is finished," said one message posted on Al-Aqsa television.
Earlier the Islamist group's radio service was interrupted by a male voice in Hebrew-accented Arabic: "Hamas leaders are hiding in the tunnels and are leaving you on the frontline of Israel's defense forces."
"Hamas leaders are lying to you and they are hiding in hospitals," he said. "Launching rockets puts civilians in danger."
Meanwhile, Hamas said it was ready for an unconditional national dialogue.
"Hamas is calling for a national meeting to counter the aggression," Mohammed Nazzal, a member of the group's politburo, told Al Arabiya television.
"We are ready to hold a meeting anywhere agreed upon without any conditions... The sole theme: how to counter the aggression because there is no time to talk about any other issue," Nazzal said.
"This is not the time to discuss differences," he told the news channel.
Hamas broke ranks with president Mahmoud Abbas's secular Fatah party in June 2007, staging a coup against the Palestinian Authority and taking control of the impoverished enclave after more than a week of deadly infighting.
Efforts to reconcile the two Palestinian factions have so far foundered.