Israeli war planes intensified attacks across the Gaza Strip today, targeting senior Hamas leaders and bombing a coastal area where four Palestinian boys were killed.
The renewed violence came after Hamas formally rejected a ceasefire proposal that had been accepted by Israel to end the nine-day-old conflict that has left at least 213 Palestinians and one Israeli dead.
Hamas fired dozens of rockets into Israel on Wednesday.
In a text message to The Associated Press on Wednesday, senior Hamas figure Sami Abu Zuhri said: "We informed Cairo today officially that we don't accept the proposal they made."
The Gaza Interior Ministry's website said Israel warplanes carried out dozens of airstrikes, targeting 30 houses, including those of senior Hamas leaders Mahmoud Zahar, Jamila Shanti, Fathi Hamas and Ismail Ashkar.
The Israeli military did not immediately comment on the strikes.
Zahar was a key figure in Hamas' violent takeover of Gaza in 2007 while the other three were members of the Palestinian parliament elected in 2006.
Many Hamas leaders have gone into hiding since the beginning of the Israeli offensive.
The four boys, who were cousins and ages nine to 11, were killed while playing on a beach off a coastal road west of Gaza City, said Ashraf Al Kedra, a Palestinian doctor.
Seven others - adults and children - were wounded in the strike, he said.
The boys' uncle, Abdel Kareem Baker, 41, raged at Israel after the attack.
"It's a cold-blooded massacre," he said. "It's a shame they didn't identify them as kids with all of the advanced technology they claim they're using."
The Israeli military said it was looking into the incident.
The Egyptian proposal had called for a halt in hostilities by Tuesday night to be followed by talks on the terms of a longer-term cease-fire, including easing Gaza's seven-year-old border blockade by Israel and Egypt.
The militant group views a significant easing of the Israeli blockade as key to its survival but does not believe Egypt's current rulers - who deposed a Hamas-friendly government in Cairo last year - can be fair brokers.
As Cairo's effort collapsed, Israeli prime minister Benjamin Netanyahu warned that Hamas will pay a high price for rejecting the truce offer.
Alongside the airstrikes, Israel also told tens of thousands of residents of the northern town of Beit Lahiya and the Zeitoun and Shijaiyah neighborhoods of Gaza City, all near the border with Israel, to evacuate their homes by 8 am.
The warnings were delivered in automated phone calls, text messages and leaflets dropped from planes.
The Israeli military said in its message that large numbers of rockets were launched from these areas and that Israel plans to bomb these locations.
"Whoever disregards these instructions and fails to evacuate immediately, endangers their own lives, as well as those of their families," the message said.
Hundreds of residents of Zeitoun and Shijaiyah were seen walking in the streets today, carrying small bags with belongings.
The Wafa Rehabilitation Centre in Shijaiyah, which cares for 15 disabled and elderly patients, received several calls demanding the patients evacuate, said its director, Basman Ashi.
He said an Israel shell hit near the building, causing damage to the second floor, but no injuries. Ashi said he will not evacuate because his elderly patients have nowhere to go.
Four foreign volunteers - from England, the US, France and Sweden - have set up camp at the rehabilitation centre to deter the military from targeting it.
English volunteer Rina Andolini, 32, said the patients range in age from 12 to over 70 and none can walk or move without assistance. She said there are also 17 Palestinian staff members.
Ms Andolini said the patients are living in a constant state of fear, intensified by the Israeli tank shelling from across the border.
When asked about the situation at the rehabilitation centre, the office of the Israeli military spokesman said its residents "have been asked repeatedly to leave".
"There is a rocket launching site in the area," the military said, adding that Gaza militants use the centre to hide "behind civilians."
Only one Israeli has so far died in the conflict - a civilian distributing food to soldiers in southern Israel on Tuesday evening - largely because of the effectiveness of Israel's Iron Dome air defense system in downing incoming rockets.