Gaza, Palestine (BBN)-Israel has urged thousands of Palestinians in eastern and northern Gaza to leave their homes as it continues air strikes.
An Egyptian truce initiative on Tuesday failed to halt rocket attacks on Israel by Hamas militants and other groups, reports BBC.
Israel, which had its first fatality on Tuesday, said senior Hamas militants had died in strikes on Gaza overnight.
Palestinian officials say Israeli raids have killed 204 people so far, including ten overnight into Wednesday.
Among those reported killed was a five-month-old baby.
Israel launched its Operation Protective Edge on 8 July.
Its stated objective is to halt Palestinian rocket attacks on Israel, but the United Nations says the majority of those killed in Gaza have been civilians.
Israelis entering a bomb shelter in Ashkelon (15 July 2014)
Israelis are seen taking refuge in a bomb shelter in the city of Ashkelon on Tuesday.
Twenty-four hours on from the first faltering attempts at a ceasefire, the conflict between Israel and Hamas grinds on to a grimly familiar pattern.
Israel says its warnings are to avoid civilian casualties in planned raids but they'll spread further fear, anger and uncertainty in Gaza where civilians will feel there are no real places of safety now.
Israeli Prime Minister Benjamin Netanyahu now faces a dilemma. There are right-wing members of his cabinet demanding a ground offensive and he doesn't want to look weak in domestic politics.
But the risks for him are significant. Ground fighting may cause huge numbers of casualties, alienating Israel's allies, and trap him into a long campaign without a clear exit strategy.
Instinctively he seems to feel that Israelis would prefer to see Hamas diminished and the rocket fire ended through the air campaign. Ground fighting would mean Israeli casualties too.
But if air power doesn't prove decisive, the political pressure for him to go further will grow.
The Israel Defense Forces (IDF) dropped leaflets and used recorded telephone messages to warn some 100,000 residents of Gaza to leave their homes before 08:00 (05:00 GMT) on Wednesday.
The warning came as militants continued to fire rockets at Israeli cities, the IDF said, adding that its Iron Dome missile shield had intercepted four rockets launched at Tel Aviv.
Israeli Prime Minister Benjamin Netanyahu earlier announced he had "no choice" but to step up the military campaign.
"When there is no ceasefire, our answer is fire," Netanyahu said.
The Egyptian-backed truce was to have started at 09:00 (06:00 GMT) on Tuesday, after it was approved by Israel's security cabinet.
Israeli attacks were halted for six hours, but resumed after militants continued to fire dozens of rockets.
Hamas said the terms of the ceasefire did not address concerns over the economic blockade of the Gaza strip, which has caused severe economic hardship for many Palestinians.
After the resumption of operations, Netanyahu said: "This would have been better resolved diplomatically; that's what we tried to do when we accepted the Egyptian truce proposal.
"But Hamas leaves us no choice but to expand and intensify the campaign against it."
Under the terms of the Egyptian initiative, the ceasefire should have been followed by a series of meetings in Cairo with high-level delegations from the two sides.
But a senior Hamas spokesman, Osama Hamdan, told the BBC it had only heard about the truce initiative through the media and that a ceasefire could not be put in place without the details of any agreement being known.
The armed wing of Hamas, the Izz al-Din Qassam Brigades, dismissed the initiative, saying its battle with Israel would "increase in ferocity and intensity".
LACK OF WATER
Netanyahu came under criticism in Israel for accepting the truce initiative.
His office announced that deputy defence minister Danny Danon had been sacked for comments branding the PM a "failure".
Israel has mobilised tens of thousands of troops on the border with Gaza amid speculation a ground invasion could be launched.
Israeli defence official Amos Gilad said: "We still have the possibility of going in, under cabinet authority, and putting an end to [the rockets]."
US state department spokeswoman Jen Psaki said Israel had the right to defend itself, but added that "no-one wants a ground war".
The IDF said militants had fired more than 150 rockets into Israel on Tuesday, and more than 1,260 since Operation Protective Edge began.
The air force and navy had carried out strikes on 96 targets in Gaza on Tuesday, and more than 1,750 in the past eight days, it added.
A 38-year-old Israeli man is said to have been killed by a mortar shell fired from Gaza near the northern border with Israel.
The UN says at least 1,370 homes have been destroyed in Gaza and more than 18,000 people displaced in recent hostilities.
The International Red Cross warned that repeated bombing was devastating Gaza's "fragile water infrastructure", with hundreds of people left without water.