An Israeli air strike has hit the Gaza home of a leader of the Palestinian militant group Hamas, witnesses and officials have said.
Crowds rushed to carry the injured into Gaza's Shifa hospital
At least eight relatives were killed in the attack, said to be on the home of Hamas lawmaker Khalil al-Hayya, who was not there at the time.
Israel's military said it had targeted militants gathered outside his house.
Hours earlier Israel's cabinet backed plans to "intensify" Gaza operations in response to recent rocket attacks.
Israeli air strikes have killed more than 30 people in the last week, several of them civilians, and have failed to stop Palestinian rocket attacks.
A BBC correspondent in the southern Israeli town of Sderot said many streets were deserted on Sunday, as hundreds of people had left their homes to avoid the rockets.
'People are suffering'
The Israeli military confirmed there had been an air strike in northern Gaza on Sunday evening, but said it was aimed at a group of armed militants gathered outside a house.
However, reports from Gaza City suggested the attack did strike Mr al-Hayya's home, and that several members of his family were among those killed.
Shortly after the air strike, Mr al-Hayya visited Gaza City's Shifa hospital, where those wounded were being treated.
"We will go ahead despite the challenges, despite the martyrs, despite the pain that I am suffering and my people are suffering," he told reporters.
A Hamas spokesman, Fawzi Barhoum, said those killed were civilian members of Khalil al-Hayya's family.
"This escalation is very serious," the Associated Press reported him as saying.
In the early hours of Monday, Israeli missiles again struck Gaza, killing a Hamas militant and damaging buildings Israel said were being used as weapons workshops.
Hours before the missile strike, Israeli Prime Minister Ehud Olmert threatened to step up military operations aimed at militants in Gaza in response to recent salvos of rocket fire against Israeli towns.
"If the measured steps we are taking, in the political and military sphere, do not bring about the desired calm, we will be forced to intensify our response," Mr Olmert said at the cabinet meeting.
The cabinet then agreed to "step up operational measures designed to reduce missile fire and strike at the terrorist infrastructure", a statement said.
The Hamas and Islamic Jihad groups would be the first targets for any "sharper" Israeli action, the cabinet decided.
Israel's decision came as Palestinian factions Hamas and Fatah appeared to be holding to truce that ended days of bitter civil fighting on the streets of Gaza.
The truce, which came into effect on Saturday afternoon, is the fifth such pact since violence broke out last Sunday.
Since then about 50 people have died in clashes between the two groups.