Saeed Seyam, the interior minister, declared a state of emergency on Thursday, according to a spokesman after fighting killed 19 Palestinians and one Israeli soldier.
Khalid Abu Hilal, a Hamas minister, told a news conference: "Because of the continuation of bloodshed and Israel's crimes, the minister of interior a few hours ago declared a full state of emergency in the homeland.
"He (Seyam) called on all Palestinian security and military services to participate in the moral, national and religious duty to defend our people ... and to confront this incursion and cowardly Zionist aggression."
However, although some security forces are controlled by Hamas, most are loyal to Mahmoud Abbas, the Palestinian president, and his Fatah movement. And Abbas is the only person who can authorise a state of emergency.
Hilal's comments were among the first by Palestinian government officials since Ehud Olmert, the Israeli prime minister, ordered tanks to push deeper into Gaza.
The Israeli military said its forces would stay in the area, several kilometres inside northern Gaza, "until the completion of their mission".
Israel's incursion began last week after one of its soldiers was captured, but the offensive was expanded after Hamas fighters fired rockets into the Israeli city of Ashkelon.
"The minister of interior a few hours ago declared a full state of emergency in the homeland"
Interior ministry spokesman
Israel has detained a third of the Hamas cabinet and threatened some of its leaders with assassination, prompting some to go into hiding.
Visiting injured Palestinians in a hospital in Gaza, Ismail Haniya, the prime minister, called the raid a crime against humanity and "a hopeless attempt to bring down the Palestinian government".
Among the deadliest attacks on Thursday, an Israeli air raid near the town of Bait Lahya in northern Gaza killed six Palestinian civilians, witnesses and medical staff said.
The army said it had carried out two air strikes against armed militants in the area, killing four gunmen. A spokeswoman said she was unaware of civilian deaths.
Bait Lahya was also the scene of the heaviest ground fighting, where fighters from various factions fired anti-tank rockets from narrow alleyways in running battles with Israeli troops who were backed up by tanks and helicopters.
An Israeli battalion commander said his forces had killed seven gunmen with sniper and tank fire. Two soldiers were wounded, the army said.
A boy killed during Israeli shelling
of Bail Lahya
Bait Lahya's streets were largely deserted as residents sheltered indoors.
"Israeli tanks are outside our house. Children are screaming and the house is shaking. We are caught in the crossfire," one woman told a local radio station.
Aircraft also launched missile strikes near the southern town of Khan Yunus.
In the West Bank city of Jenin, two Palestinians - a resistance fighter and a 16-year-old stone thrower - were killed by Israeli troops, Palestinian medics said. The army said it had killed the gunman and was checking the other report.
Aljazeera's correspondent in Jenin reported that the Fatah-linked al-Aqsa Martyrs Brigades leader Zakariya al-Zubaidi and Islamic Jihad official Mahmoud al-Saadi escaped an Israeli assassination attempt on Thursday evening after Israeli forces stormed a funeral for a Palestinian fighter where the two men were.
The Palestinian toll is the highest in a single day since Israeli forces killed 28 people in September 2004 in northern Gaza.