Israel has intensified aerial bombardment of Gaza after the country's Defence Minister Ehud Barak authorized the call-up of 30,000 army reservists, amid reports of a possible ground offensive.
Israel said it fired at more than 130 targets in Gaza overnight, saying militants fired 11 rockets from Gaza.
Fighting has intensified since Israel killed Ahmed Jabari, the military leader of the Islamist group that controls the territory, on Wednesday.
At least 18 Palestinians in Gaza have been killed in Israeli airstrikes, including children, and three Israelis have been killed by Palestinian rocket fire into southern Israel.
According to the BBC, explosions continued in Gaza throughout Thursday night as Israel stepped up its air bombardment, with huge blasts rocking Gaza City as dawn broke on Friday.
Palestinian militants too have continued to fire rockets at Israeli cities.
Israeli Defence Minister Ehud Barak said targeting Tel Aviv would 'exact a price that the other side will have to pay'.
Early on Friday, Israel's army said leaflets had been dropped over several locations in the Gaza Strip, warning residents 'to stay away from Hamas, and other terror organizations'.
"Before action, the IDF disperses warning leaflets calling all civilians to evacuate the area. This happened [on Thursday]," the army tweeted.
The Hamas Prime Minister in Gaza, Ismail Haniyeh, condemned what he called Israel's 'ferocious assault' against the territory, the report said.
Many of the Palestinians killed in Gaza during the last two days by the Israeli aerial and naval bombardment were members of militant groups.
Egypt's new Islamist President Mohammed Mursi called the Israeli bombardment "unacceptable aggression" and said it would affect stability in the region, it added. (ANI)