Palestinians gather around the ruins of a building after an Israeli missile strike hit the home of a Hamas member in Beit Lahiya, in the northern Gaza Strip, on Monday. (Fadi Adwan/Associated Press)UN Secretary General Ban Ki-moon called on both Israel and Hamas to stop the violence as Israeli air strikes pounded Hamas targets in the Gaza Strip, but bombs continued to fall Tuesday morning.

Ban said Monday he was "troubled and concerned" by the situation and "deeply alarmed" by the escalating violence.

With the Israeli city of Ashkelon in the background, an Israeli missile explodes in the Gaza Strip on Monday. (Sebastian Scheiner/Associated Press)

The UN chief said he has repeatedly condemned the rocket attacks by Hamas militants against Israel and "the excessive use of force of Israel in Gaza."

"The frightening nature of what is happening on the ground, in particular its effects on children, who are more than half of the population, troubles me greatly," he said.

"All this must stop. Both Israel and Hamas must halt their acts of violence and take all necessary measures to avoid civilian casualties. A ceasefire must be declared immediately."

Ban's comments came as speculation mounted that Israel was preparing to launch a large-scale ground offensive in the area and as the country's defence minister declared an "all-out war" with the militant group.

Israeli aircraft dropped at least 16 bombs on five Hamas government buildings in a Gaza City complex on Tuesday, destroying them, witnesses said. Rescue workers said 40 people were injured.

On Monday, Israeli air strikes destroyed a five-storey building in the women's wing at Islamic University, one of the most prominent Hamas symbols, a compound controlled by Preventive Security, one of the group's chief security arms, and a house next to the residence of Hamas Prime Minister Ismail Haniyeh.

Reporting from the Israeli/Gaza border, CBC's Peter Armstrong said dozens of tanks have been assembled. Israel has also doubled the number of troops on the Gaza border since Saturday and deployed an artillery battery.

The three-day death toll from the attacks reached 364, according to Palestinian officials, with more than 1,400 wounded.

The United Nations Relief and Works Agency said at least 62 of the dead were civilians.

A medium-range rocket fired at the Israeli city of Ashkelon killed a man Monday and wounded several others. It was the second fatality in Israel since the beginning of the offensive and the first rocket-related death in the city, the Associated Press reported.

Despite the more than 300 Israeli air attacks over the weekend, more than 100 rockets and mortar rounds have been fired out of Gaza and into southern Israel since the Israeli operation began.

Armstrong said Hamas had launched only a smattering of rockets on Sunday, but had intensified its attacks on Monday.

Palestinians gather next to a building used by the Islamic group Hamas after it was hit in an Israeli missile strike in Jebaliya, northern Gaza Strip, on Monday. (Hatem Moussa/Associated Press)

"We've seen more rockets and mortars fired out of Gaza into southern Israel than we saw through the day yesterday. Clearly the response from Hamas is now beginning to really start to increase. There was a lot of questions yesterday as to why Hamas was not firing as many rockets."

Also on Monday, Israel declared the areas abutting the Gaza Strip a closed military zone, barring civilians and journalists from the region. The buffer zone ranges from two to four kilometres around Gaza.

An Israeli military spokesperson told Reuters the closure was due to the risk of retaliatory Palestinian rocket fire.

Meanwhile, in a special session of the Israeli parliament, Defence Minister Ehud Barak defended the government's actions, saying the goal of the operation is to stop Hamas from launching rocket attacks at its civilian population. He said the offensive will be "extended and deepened as we find necessary."

"We have nothing against the citizens of Gaza, but we must fight against the Hamas leadership. We are making the utmost efforts to prevent civilian casualties," Barak said.

Israel is in an "all-out war with Hamas and its proxies," he said.

Israel's cabinet approved a call-up of 6,500 reserve soldiers, raising fears of an impending ground offensive.

Since Israel's withdrawal from Gaza in 2005, after 38 years of full military occupation, Israeli forces have repeatedly returned to the territory to hunt militants. However, Israel has shied away from retaking the entire strip, for fear of getting bogged down in urban warfare.

Military experts said Israel would need at least 10,000 soldiers for a full-scale invasion.

Both Israel and Hamas have drawn international criticism for their attacks, with Arab countries generally condemning Israel, and the United States holding Hamas responsible for a broken ceasefire and renewed violence.

Protests gain momentum

White House spokesman Gordon Johndroe said the Hamas organization has "once again shown its true colours as a terrorist organization," and that Israel's actions were "in response to the mortar and rocket attacks on Israel."

Protests around the world against the Israeli offensive continued Monday.

In Beirut, tens of thousands of Hezbollah supporters stood in pouring rain Monday to protest the Israeli assault.

In Egypt, thousands of people rallied, calling for the intervention of Arab armies to protect the Palestinians.

About 1,000 backers of anti-American Shia cleric Muqtada al-Sadr also staged a protest in eastern Baghdad.

The political party of Iraqi Prime Minister Nouri al-Maliki issued a statement condemning the attacks, and calling on Islamic countries to cut relations with Israel and end all "secret and public talks" with it.

With files from the Associated Press