Aimed at rooting out Palestinian resistance fighters who fire rockets at Israeli targets, the raid underway in northern Gaza is Israel's biggest and deadliest offensive in more than four years of conflict with the Palestinians.
"We must expand the areas of operation to ward off the militant launchers from the areas within the firing range of rockets into Jewish towns over the border," Sharon said on Saturday.
The Israeli raid, launched on Tuesday, has wrought death and destruction in northern Gaza and has been internationally condemned as a "disproportionate" response to Palestinian fire.
"We must operate in Gaza in a way that will prevent attacks on settlements now and during the withdrawal," Sharon said.
"It's necessary to change the situation in Gaza, to hit the militants and the heads of terror groups and those who create weapons that target us."
Sharon's threat of expanding the raid comes after the White House counselled Israel to limit its current offensive.
Nearly 200 tanks and armoured vehicles have been operating around three Palestinian refugee camps of northern Gaza in the massive offensive.