Israeli Prime Minister Benjamin Netanyahu said the country is ready to "significantly expand" its Gaza offensive.
"We are extracting a heavy price from Hamas and the terror organisations," Mr Netanyahu said at the start of the weekly cabinet meeting on the fifth day of the conflict.
"The soldiers are ready for any activity that could take place."
On Friday, ministers doubled the current reserve troop quota set for the offensive to 75,000 in preparation for a possible ground invasion.
Some 30,000 soldiers have already been called up.
Israeli President Shimon Peres told Sky's Murnaghan programme that he does not see a ground invasion as an escalation of the conflict.
Some 30,000 Israeli soldiers have already been called up"What we are doing is self defence," he said.
"What would you do in London if you would have 900 missiles aimed at your schools, at your homes, at your houses? Would you call it an escalation if you tried to stop it?
"We don't have any purpose to control Gaza or to go into Gaza.
"Basically our purpose is peace, their purpose is to destroy Israel. It is not an easy situation."
Foreign Secretary William Hague tells Sky News Murnaghan that Britain has warned Israel against a ground invasion.
"The Prime Minister and I have both stressed to our Israeli counterparts that a ground invasion of Gaza would lose Israel a lot of the international support and sympathy they have in this situation," he said.
"A ground invasion is much more difficult for the international community to sympathise with or support, including the United Kingdom."
But Mr Hague blamed Hamas for sparking the current conflict in Gaza.
"We call on Hamas again to stop the rocket attacks on Israel, it is Hamas that bears principal responsibility for starting all of this and we would like to see an agreed ceasefire - an essential component of which is an end to those rocket attacks."
Israel pounded Gaza from the air and sea overnightUS President Barack Obama said it was "preferable" for the crisis to end without a "ramping up" of Israeli military activity, but he blamed Hamas militants for causing the showdown.
"Israel has every right to expect that it does not have missiles fired into its territory," Mr Obama said, in Thailand.
Israel's bombardment of Gaza entered a new phase overnight, with the military shelling the Palestinian territory from the sea, as well as continuing its airstrikes.
On Sunday, five Palestinian civilians were killed in airstrikes, including four children ranging in age from one to seven, according to Ashraf al-Kidra, a Gaza health official.
The deaths bring to 51 the number of Palestinians killed since the operation began on Wednesday. More than 400 people have been wounded in the strikes.
On the Israeli side, three civilians have been killed and more than 50 wounded by rocket fire.
Palestinians in Gaza this morning fired rockets at Tel Aviv for the fourth straight day. Police said two rockets were shot down by Israel's Iron Dome air shield.
Earlier Sunday, at least one rocket fired by Gaza militants landed in Ashkelon in southern Israel.
But a Palestinian official told AFP news agency that a truce was possible "today or tomorrow", after Egypt's President suggested that there could be a ceasefire soon.
Palestinian girls in the northern Gaza StripMohamed Morsi said: "There are now intensive efforts through communication channels with the Palestinian side and with the Israeli side and there are now some indications that there is possibility of a ceasefire soon between the two sides."
Israel has said it is not prepared to enter into a truce without guarantees the rocket fire will stop.
The latest Israeli strikes also hit two Gaza media centres housing the offices of Al Quds TV and Al Aqsa, both seen as sympathetic to Hamas.
A Gaza press association said six Palestinian journalists were wounded, including an Al Quds employee who lost a leg.
The media buildings hit were also being used by foreign journalists, including Sky News and ITN.
Tom Rayner, Sky News Middle East editor, said on Twitter: "There don't appear to have been any injuries following Israeli strike on international media building being used by Sky News, ITN and others."
Sky's Sam Kiley: "I think that this demonstrates just how dangerous and complex with aerial bombardment is."
An Israeli military spokeswoman said the strike had targeted a rooftop "transmission antenna used by Hamas to carry out terror activity".
The attacks followed a defiant statement by Hamas military spokesman Abu Ubaida.
"This round of confrontation will not be the last against the Zionist enemy and it is only the beginning."
A Palestinian protester in West Bank city of JeninThe masked gunman dressed in military fatigues insisted that despite Israel's blows Hamas "is still strong enough to destroy the enemy".
Israel military spokesman Yoav Mordechai warned that Israel would go after Hamas commanders Sunday, in addition to rocket squads, in "more targeted, more surgical and more deadly" attacks.
Israel unleashed its massive air campaign on Wednesday, killing a leading militant of the Hamas Islamist group that controls Gaza and rejects Israel's existence.
Israel says it is trying to stop militants in the coastal enclave from launching rockets that have plagued its southern communities for years.
More than 500 rockets fired from Gaza have hit Israel since the recent violence flared on Wednesday.
The Jewish state has launched more than 950 air strikes since then.
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