Updated at 8:43 p.m. ET: As Israel entered its fifth day of airstrikes on Gaza, a missile targeted at a top militant flattened a three-story building, killing 10 members of a family.
The attack, which came as Middle East leaders attempted to negotiate a ceasefire, triggered fear that Israel could launch a ground offensive and lead to war.
Twelve people died in the overnight attack, including four children and four women. At least 75 Palestinians have died so far in this nearly week-long conflict. More than 600 have been injured.
In Israel, where half the country is now within reach of rockets, three people have been killed. Dozens have been injured.
In Tel-Aviv, the country’s commercial capital, sirens sounded for the first time since the Gulf War. Targeted attacks Sunday on the trendy city were shot down, the Christian Science Monitor reported.
Meanwhile, President Barack Obama said he fully supported Israel's right to defend itself and called for an end to the firing of missiles into Israel by militants inside Gaza in order for a peace process to go ahead.
"If this can be accomplished without a ramping up of military activity in Gaza, that is preferable," Obama said during a visit to Myanmar. "That's not just preferable for the people of Gaza, it's also preferable for Israelis because if Israeli troops are in Gaza they're much more at risk of incurring fatalities or being wounded."
The conflict between the two sides ratcheted up after Israel launched an air strike Wednesday that killed Ahmed al-Jabari, Hamas’s top military leader. Hamas, deemed a terrorist organization by the U.S. and Israel, won parliament seats in Gaza in 2006 and took control of the area in 2007.
Israel's declared goal is to deplete Gaza arsenals and press Hamas into stopping cross-border rocket fire that has plagued Israeli border towns for years.
After Jabari was killed, the Israel Defense Forces posted a video of the airstrike on YouTube. Then they tweeted: “We recommend that no Hamas operatives, whether low level or senior leaders, show their faces above ground in the days ahead.”
In Cairo, Egyptian President Mohamed Morsi worked behind the scenes to broker a truce. He said "there are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees.''
Egypt has mediated previous ceasefire deals between Israel and Hamas, the latest of which unraveled with recent violence.
In Jerusalem, an Israeli official declined to comment on the negotiations. Military commanders said Israel was prepared to fight on to achieve a goal of halting rocket fire from Gaza, which has plagued Israeli towns since late 2000, when failed peace talks led to the outbreak of a Palestinian uprising.
Diplomats at the United Nations said Secretary-General Ban Ki-moon is expected to visit Israel and Egypt in the coming week to push for an end to the fighting.
The conflict speaks to a much broader question of whether Israel should cede land so that Palestine may become a state. The U.N., European Union and Russia agree there should be separate states, with Gaza being included in the Palestinian state.
In May 2011, President Barack Obama also agreed: “We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps so that secure and recognized borders are established for both states.”
That would leave Israel with just nine miles at its narrowest, however, which its leaders say would be difficult to protect.
Israel was prepared to substantially broaden its operation in the Gaza strip, Prime Minister Benjamin Netanyahu said on Sunday as military planes continued to bomb targets in Gaza City.
"The Israel Defense Forces have attacked more than 1,000 terror targets in the Gaza Strip," Prime Minister Benjamin Netanyahu said at a cabinet meeting. "We are exacting a heavy price from Hamas and the terrorist organizations and the Israel Defense Forces are prepared for a significant expansion of the operation."
He gave no specifics and made no mention of the possibility of a ground offensive.
But Israeli cabinet ministers decided on Friday to more than double the current reserve troop quota set for the Gaza offensive to 75,000 and around 16,000 reservists have already been called up.
Asked by reporters whether a ground operation was possible, Maj.-Gen. Tal Russo, commander of the Israeli forces on the Gaza frontier, said: "Definitely.''
“We have a plan. ... It will take time. We need to have patience. It won't be a day or two,'' he added.
A possible move into the densely populated Gaza Strip and the risk of major casualties it brings would be a significant gamble for Netanyahu, favored to win a January election.
The last Gaza war, a three-week Israeli blitz and invasion over the New Year of 2008-09, killed 1,400 Palestinians, mostly civilians. Thirteen Israelis died in the conflict.
At least two rockets fired from Gaza toward Tel Aviv, Israel's commercial capital, were shot down Sunday by Israel's Iron Dome air shield, witnesses and officials said.
NBC's Paul Goldman saw at least one missile being intercepted by Israel's anti-rocket defense system over the center of the city.
"I was taking cover and heard a huge bang," Goldman said. "(I) looked up and saw the explosion in the air above me. I could smell the fire."
Israel's strikes were causing widespread damage, Mohyeldin reported from Gaza. "These strikes are portrayed as precision strikes, but they are anything but that given how densely populated the area is," he said.
Reuters and The Associated Press contributed to this report.
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