(Moti Milrod ~ Associated Press)
Israeli Defense Minister Ehud Barak said an even broader Gaza operation was possible, aimed at crushing militant rocket squads but also to "weaken the Hamas rule, in the right circumstances, even to bring it down."
The Palestinian death toll rose by 26, bringing the number killed to 114 since the latest bout of fighting erupted Wednesday, according to Palestinian medical officials and militant groups. At least 54 Palestinians and two Israelis were killed Saturday, the single deadliest day in more than seven years of fighting.
The Gaza onslaught has failed to protect southern Israel, where residents have faced repeated rocket attacks since 2001. Gaza militants fired more than 25 rockets at southern Israel Sunday, the military said, scoring direct hits on houses in the city of Ashkelon and the town of Sderot. Nine Israelis were injured, rescue services said.
Palestinian negotiator Saeb Erekat said peace talks with Israel had been halted.
"For the time being, the negotiations are suspended because we have so many funerals," he said. It was unclear when the talks, relaunched last November at a U.S.-hosted summit, would resume.
The violence clouded an upcoming visit by Secretary of State Condoleezza Rice.
The Israeli and Palestinian leaders have set a December target for concluding a final peace deal. But instead of promoting peace, Rice will likely spend her visit this week trying to put out the latest fire.
The Bush administration demanded a halt to the fighting.
"The violence needs to stop and the talks need to resume," Gordon Johndroe, a spokesman for the National Security Council, said in Texas.
Before dawn Sunday, Israeli aircraft sent missiles slamming into the empty offices of Gaza's Hamas prime minister, Ismail Haniyeh. No one was hurt, but the attack was seen as a tough message to the Hamas leadership, which has refused to halt rocket barrages at a growing swath of southern Israel.
Roughly half of those killed since Wednesday were civilians, medical officials said. On Saturday, Palestinian leaders called the killings "genocide" and a "holocaust."
"We are following the aggression against our people in Gaza," Palestinian President Mahmoud Abbas told reporters. He said he had contacted the U.N. Security Council, the EU and Arab leaders "to work to stop this aggression."
Abbas has wielded little influence in Gaza since Hamas vanquished his forces and took over last June. In a symbolic move, he donated blood for Gaza residents at his West Bank office.
The normally bustling streets of Gaza City were eerily empty. The sound of verses from the Muslim holy book, the Quran, sounding from mosque loudspeakers mingled with the roar of Israeli warplanes and unmanned drones in the sky.
Hundreds gathered outside Gaza hospitals waiting for bodies to be brought out of morgues for burial. Many, like schoolteacher Tawfek Shaban, a 44-year-old father of five, were holding small radios, listening to the news.
"Shame on the Arabs, shame on the Muslims, shame on humanity ... When will they act to stop Israel?" Shaban asked.
The reduced casualty count may have been the result of new measures imposed by Hamas. It told its fighters to use alleys for cover and avoid moving in large groups, ordered schools closed and set up roadblocks to keep civilians out of battle zones. In recent days, schoolchildren had left their studies to watch the fighting. The order forced children to stay at home.
The unrest spilled over to the West Bank, where Abbas and his Fatah faction run a rival government.
In the West Bank town of Hebron, a 14-year-old Palestinian boy was fatally shot in the chest during a protest against Israel, Palestinian medical officials said. It was the first death in the West Bank connected to the Gaza offensive.
An Israeli military spokesman said youths staged a "violent demonstration," throwing firebombs and putting soldiers at risk. Later about 2,000 angry Hamas supporters marched through the city streets, waving copies of the Quran and green Hamas flags. "Revenge. Revenge. Retaliate in Tel Aviv," the crowd chanted.
Schools and shops across the West Bank shut down to protest the operation in Gaza and there were demonstrations at traditional flashpoints like checkpoints, watchtowers and patrol routes.
In Ramallah, home to Abbas' government, club-wielding Palestinian security forces used tear gas and pushed back dozens of women demonstrating in support of Hamas. Security forces tried to stop TV crews filming and clubbed protesters, said Muhib Barghouthi, a photographer who was on scene.
The Gaza offensive also drew a chorus of international condemnation. The EU and U.N. chief Ban Ki-Moon accused Israel of using excessive force. The U.N. Security Council urged Israelis and Palestinians "to immediately cease all acts of violence."
At the weekly meeting of his Cabinet, Israeli Prime Minister Ehud Olmert rejected the criticism.
"Nothing will prevent us from continuing operations to protect our citizens," he said. "No one has the moral right to preach to Israel for taking the elementary step of self-defense."
Olmert, commenting on the suspension of talks, said "attacking Hamas strengthens the chance for peace."
"I'm sure that beyond certain statements, the Palestinian leadership, the one with whom we want to achieve peace, also understands that," he said.
Israel regularly clashes with Gaza rocket squads, but it intensified its operations last week after militants fired salvos into Ashkelon, a city of 120,000 11 miles north of Gaza. By targeting a center like Ashkelon, only 25 miles from the metropolis of Tel Aviv, Hamas raised the stakes and added pressure on Israeli leaders to respond.
In Sderot, the town nearest Gaza which has suffered most of the rocket attacks over the past seven years, daily life has become almost unbearable. The rockets have killed 13, wounded dozens and caused millions of dollars in damage.
Egypt has cooperated with an Israeli blockade of Hamas in Gaza, but opened its sealed border crossing with the territory Sunday to allow some of the Palestinian wounded access to medical care.
Egypt sent 27 ambulances to the Rafah crossing to transfer between 150 to 200 wounded, said Imad Kharboush, a medical official at a hospital in el-Arish, near the Israeli border.