Fighting is still raging in the northern half of the Gaza Strip, two days after Israel sent in troops and tanks to tackle militants who have been firing rockets into southern Israel.
A BBC correspondent says the fighting now appears to have moved deeper into the territory, with Israeli forces dividing it into two.
Israeli Defence Minister Ehud Barak said the offensive would continue until "peace and tranquility" were secured for Israeli civilians.
The Israeli ground operation is being supported by intensive aerial, land and naval bombardment of Gaza.
The Palestinian health ministry says more than 500 Palestinians have now been killed since the Israelis began their assault on Gaza 10 days ago, and 70 since the ground offensive began.
More children were killed on Monday, Palestinian sources say.
UN officials say Palestinian hospitals are struggling to cope with the casualties and are short of vital medical supplies.
Israel says one of its soldiers has been killed and 34 wounded since the ground offensive began. Four other Israelis have died.
Israel says its offensive has reduced the number of rocket attacks substantially. However, at least 30 rockets were fired on Sunday.
International calls for a ceasefire have so far been ignored.