At least 56 Palestinians have been killed, most of them in Gaza, since Israel launched its latest offensive, Operation Days of Reckoning, earlier this week.
The latest deaths came when two members of the Palestinian resistance group Hamas were killed when an Israeli missile slammed into their car in the Jabalya refugee camp on Saturday, Palestinian security sources said.
Hamas loyalists took the bodies to the mortuary and vowed revenge against Israel.
About 200 tanks and armoured vehicles have been operating in the area since Tuesday.
"The cabinet has declared a state of emergency throughout the Palestinian territories in order to come to the aid of the people of the Gaza Strip, victims of horrible crimes committed by the Israeli army," a statement issued by the Palestinian cabinet said.
All ministries and public institutions were called on to concentrate their efforts on providing assistance to the people of Gaza.
At the same time, officials said Palestinian Prime Minister Ahmad Quraya had cancelled a trip to Russia and Turkey in order to attend an emergency cabinet session to be held later in the day.
Denouncing what it called "world silence in the face of the magnitude of crimes committed", the statement called on the international quartet that drafted a Middle East peace plan last year to "intervene immediately to ensure the protection of our people".
Ahmad Quraya is to attend an
emergency cabinet session
The quartet consists of the United States, Russia, the European Union and the United Nations.
The statement also called on international humanitarian organisations to provide aid to people in the Gaza Strip, notably in the Jabalya refugee camp, which has been a focal point of fighting this week.
Earlier on Saturday, troops killed four Palestinian resistance fighters as they crossed the Karni crossing on the Gaza border into southern Israel.
The army said soldiers had learned of fighters planning to attack a town in the area.
The latest deaths make this one
of Israel's deadliest raids to date
This occurred shortly after a Palestinian was killed by Israeli gunfire at Rafah in the southern Gaza Strip.
Muhammad al-Hashash, 63, was killed near his home during an Israeli raid, the sources added.
Also, two Islamic Jihad fighters were killed and four others were wounded in an Israeli missile strike on the Jabalya refugee camp in the north of the Gaza Strip overnight, Palestinian security officials said.
On Friday, gun battles had raged through Jabalya, home to 100,000 Palestinians.
Israeli army bulldozers destroyed up to 70 houses to clear paths for forces as troops made their way through the camp's booby-trapped streets, Aljazeera's correspondent reports.
Israeli forces focused most of their activity on the Jabalya refugee camp and Bait Lahia outskirts, Aljazeera's correspondent said.
The correspondent added that hundreds of Palestinians were left homeless.
For his part, Prime Minister Quraya has called Israel's offensive "state terror that deliberately targets civilians" and urged international intervention.
Bulldozers have destroyed up to
70 homes in the Jabalya camp
Commenting on the raid, a White House spokesman said Israel "has the right to defend itself", but urged both sides to promote the road map peace plan, backed by President George Bush and currently stalled by violence.
The resistance movement, Hamas, has called the raid "all-out war" and vowed not to submit.
"The Israeli military operation has failed," a leader of the Hamas military wing, Izz al-Din al-Qassam Brigades, said from the Jabalya refugee camp, referring to ongoing efforts to stop the rockets.
"We will continue to fire al-Qassam rockets, and we call on the residents of Ashkelon to leave their homes."
Al-Qassam Brigades said on their website they were "besieging the Zionist enemy advances in northern Gaza Strip and inflicting severe casualties in its lines".
Thay added that the "martyrs units" in al-Qassam Brigades had succeeded in directing painful blows to the Zionist enemy, which only understood the language of force.