Israel has pressed ahead with a fierce military offensive in the Gaza Strip, killing as many as 10 senior Hamas military figures.
The country's defence force also toppled a pair of high-rise towers housing Hamas facilities in airstrikes.
Meanwhile, the Islamic militant group showed no signs of backing down and fired hundreds of rockets at Israeli cities.
In just three days, this latest round of fighting between the bitter enemies has already begun to resemble - and even exceed - a devastating 50-day war in 2014.
Israel carried out an intense barrage of airstrikes just after sunrise, striking dozens of targets in several minutes that set off bone-rattling explosions across Gaza.
Airstrikes continued throughout the day, filling the sky with pillars of smoke.
At nightfall, the streets of Gaza City resembled a ghost town as people huddled indoors on the final night of Islam's holiest month of Ramadan.
The evening, followed by the Eid al-Fitr holiday, is usually a time of vibrant night life, shopping and crowded restaurants.
"There is nowhere to run. There is nowhere to hide," said Zeyad Khattab, a 44-year-old pharmacist who fled with a dozen other relatives to a family home in central Gaza after bombs pounded his apartment building in Gaza City.
"That terror is impossible to describe."
Gaza militants continued to bombard Israel with nonstop rocket fire throughout the day and into early Thursday.
The attacks brought life to a standstill in southern communities near Gaza, but also reached as far north as the Tel Aviv area, about45 miles to the north, for a second straight day.
The military said sirens also wailed in northern Israel's Emek area, or Jezreel Valley, the farthest the effects of Gaza rockets have reached since 2014.
"We're coping, sitting at home, hoping it will be OK," said Motti Haim, a resident of the central town of Beer Yaakov and father of two children.
"It's not simple running to the shelter. It's not easy with the kids."
Gaza's Health Ministry said the death toll rose to 69 Palestinians, including 16 children and six women.
Islamic Jihad confirmed the deaths of seven militants, while Hamas acknowledged that a top commander and several other members were killed.
A total of seven people have been killed in Israel, including four people who died on Wednesday.
Among them were a soldier killed by an anti-tank missile and a six-year-old child hit in a rocket attack.
While United Nations and Egyptian officials have said that cease-fire efforts are underway, there were no signs of progress.
Israeli television's Channel 12 reported late on Wednesday that Prime Minister Benjamin Netanyahu's Security Cabinet authorised a widening of the offensive.
UN Secretary-General Antonio Guterres condemned the "indiscriminate launching of rockets" from civilian areas in Gaza toward Israeli population centres, but he also urged Israel to show "maximum restraint".
US Secretary of State Antony Blinken called Mr Netanyahu to support Israel's right to defend itself and said he was sending a senior diplomat to the region to try to calm tensions.
The current eruption of violence began a month ago in Jerusalem, where heavy-handed Israeli police tactics during Ramadan and the threatened eviction of dozens of Palestinian families by Jewish settlers ignited protests and clashes with police.
A focal point was the Al-Aqsa Mosque, built on a hilltop compound that is revered by Jews and Muslims, where police fired tear gas and stun grenades at protesters who threw chairs and stones at them.
Hamas, claiming to be defending Jerusalem, launched a barrage of rockets at the city late on Monday, setting off days of fighting.
The Israeli military says militants have fired about 1,500 rockets in just three days. That is roughly one-third the number fired during the entire 2014 war.
Israel, meanwhile, has struck over 350 targets in Gaza, a tiny territory where two million Palestinians have lived under a crippling Israeli-Egyptian blockade since Hamas took power in 2007.
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