Israel briefly deployed troops inside the Gaza Strip for the first time early Sunday as some 4,000 people fled southward from the northern part of the territory in the face of Israeli threats to step up attacks there.
Neither Israel nor Palestinian militants show signs of agreeing to a cease-fire to end their weeklong conflict, despite calls by the United Nations Security Council and others that they lay down their arms.
With Israel massing tanks and soldiers at Gaza's borders, some fear the latest Israeli threats could signal a wider ground offensive that would bring even heavier casualties than the 166 Palestinian deaths already registered.
"All our ground forces are ready," a senior Israeli military official said Sunday. "We have been training for this. We will exploit our ability the moment a decision is made to do so."
Early Sunday, Israeli naval commandos launched a brief raid into northern Gaza to destroy what the military described as a rocket-launching site, an operation it said left four of its soldiers slightly wounded.
The Israeli air force later dropped leaflets warning residents to evacuate their homes ahead of what Israel's military spokesman described as a "short and temporary" campaign against northern Gaza to begin sometime after 12pm . The area is home to at least 100,000 people.
It was not clear whether the possible attack would be confined to stepped-up airstrikes or whether it might include a sizeable ground offensive - something that Israel has so far been reluctant to undertake.
As the ultimatum drew near, hundreds fled Beit Lahiya, one of the communities the Israeli announcement affected. Some raced by in pickup trucks, waving white flags.
"They are sending warning messages," resident Mohammad Abu Halemah said.
"Once we received the message, we felt scared to stay in our homes. We want to leave." Adnan Abu Hassna, a spokesman for the UN agency in charge of aiding Palestinian refugees, said eight schools were opened as temporary shelters, and about 4,000 people had moved in. He said more schools would be opened if needed.
Essam Al Sultan, 46, a farmer from Beit Lahiya said he had taken the decision to flee the area because the youngest of his eight children had been terrorized by the constant sound of explosions in and around their community.
"For me I don't fear death because we are dying every single moment of this war but I left because I want to protect my family," he said.
Ignoring international appeals for a cease-fire, Israel widened its range of Gaza bombing targets Saturday to include civilian institutions with suspected Hamas ties. One strike hit a center for the disabled, killing two patients and wounding four people.
In a second attack, an Israeli air strike flattened the home of a cousin of Gaza police chief Taysir al-Batsh and damaged a nearby mosque as evening prayers ended, killing at least 18 people.
Fifty were wounded, including al-Batsh himself, who had earlier received warnings that he was an Israeli target and had moved away from his own home.
On Sunday, hundreds chanting "God is Great" joined the funeral procession for 17 members of al-Batsh's extended family who were killed. Among the dead were his cousin and her husband, along with the couple's seven children, ranging in age from 13 to 28. A neighbour also was killed.
Mourners carried the bodies, wrapped in the green flags of the Islamic militant Hamas, through the streets on stretchers.
The attack reduced al-Batsh's cousin's home to sand and rubble. Ahmad al-Batsh, a nephew of the police chief, said Israel had not given a warning before the strike.
Hamas activists said the group's military wing had asked the families of its members to leave their homes, after Israel targeted several such homes in a series of airstrikes.
