Israel has pledged to continue the operation, which has already cost the lives of more than 60 Palestinians, until a soldier abducted by Palestinian fighters is freed and crude rocket attacks over the border are stopped.
On Wednesday evening, an Israeli airstrike hit a group of people in the southern Gaza town of Deir al-Balah on Wednesday, killing five people and wounding six others, Palestinian officials said.
Israel has rejected calls from the governing Hamas movement for negotiations on a prisoner swap. Hamas accuses Israel of using the offensive to try to topple its elected government.
Earlier on Wednesday, in an attempt to kill senior commanders of Hamas's armed wing, an Israeli air raid brought down a three-storey building on the northern edge of Gaza City.
Palestinians search for survivors
after an Israeli air strike
The air strike killed a local Hamas leader, Nabil Abu Selmeya, his wife and seven sons and daughters aged between seven and 19, medics said.
His eldest son, who was not at home, survived.
Israel said the man who has topped its wanted list for 10 years was also wounded.
But the military said it did not know how badly Muhammad Daif, a Hamas bomber who had escaped previous assassination attempts, was hurt.
"The fact that the meeting between Deif and the others took place in a residential building is an indication they intended to use the inhabitants as a human shield to protect themselves," an Israeli military spokesman said.
Palestinian medics confirmed that Daif had been wounded and operated on. Another 23 people were also wounded in the attack.
But Abu Obaida, the spokesman for Hamas's military wing, denied the report.
"We categorically deny that Daif was wounded ... This deceitful information intended to cover up Zionist crimes," he told reporters.
He also said the attack would "change all standards, opening new options that never have been used".
Hamas activists inspected the bodies being brought into the hospital.
At daybreak they said that Raad Said, a senior Gaza commander, was wounded and was being treated at a secret location, but they made no mention of Daif.
Israel Army Radio said Ahmad Randur, a Gaza commander involved in the abduction of the Israeli soldier on June 25, had also been inside the house.
The Israeli military said it attacked the house because it was a "meeting place for terrorists" who were planning attacks and rocket launches.