At least 22 people, including five Palestinian children, have died in Gaza's worst day of fighting since Israeli incursions in early March.
A Hamas ambush in northern Gaza killed three Israeli troops, Israel's highest daily loss in the area for 3 years.
That sparked Israeli air strikes near Bureij refugee camp, which Israel said targeted gunmen, but which left five children among 11 people killed.
A cameraman also died when his car was apparently fired on by an Israeli tank.
UN Secretary-General Ban Ki-moon said he was gravely concerned by the escalation of fighting and urged both sides to show restraint.
At least 100 people were killed during operations launched by Israel in early March after Palestinian rocket attacks on its territory.
DAY OF BLOODSHED IN GAZA
Children among 11 killed by Israeli air strike near Bureij
Three Israeli soldiers killed near Nahal Oz
Four Hamas militants killed by Israeli troops east of Gaza City
Reuters cameraman (above) and two others killed in apparent tank-strike
One man killed on air strike on car near Beit Lahyia
Since then, casualty figures had dwindled in Gaza with Egypt attempting to broker some sort of ceasefire, the BBC's Tim Franks reports.
Now the chances of that appear slimmer than ever, our Middle East correspondent says.
Wednesday's highest death-toll came when Israel launched air-strikes near the Bureij camp. According to Hamas, Israeli helicopters launched four missiles.
Earlier, three Israeli soldiers were killed and three wounded when Hamas gunmen approached the security fence near the Nahal Oz crossing, Israel's army said.
The deaths were Israel's highest daily toll in the area since 2006.
Pursuing two Hamas fighters who had planted a bomb, the soldiers were ambushed by a second Hamas group lying in wait, Israel's military said.
Hamas said it had mounted a "sophisticated ambush".
In other violence throughout the day, a Reuters cameraman was among three killed when his car exploded, apparently after being hit by an Israeli tank shell.
Two others died in the blast that killed the Reuters cameraman
Fadel Shana, 23, was killed along with two bystanders after he got out of a car marked "TV" and "Press" in central Gaza, the agency reports.
Film recovered from his camera shows an Israeli tank opening fire several hundred metres away, Reuters adds.
It goes blank about two seconds after the shell is fired - apparently at the moment it hit the car.
An Israeli military official later expressed regret at the cameraman's death.
"The presence of media, photographers and other uninvolved individuals in areas of warfare is extremely dangerous and poses a threat to their lives," he told Reuters.
In other fighting on Wednesday, four Hamas militants were killed by Israeli troops east of Gaza City.
An air strike on a car also killed one Palestinian near Beit Lahyia, in the north of the strip.
It is hard to say whether the recent spike in Israeli military casualties is down to more effective tactics by Hamas or simply the result of increased Israeli activity in Gaza and therefore increased exposure, says BBC defence and security correspondent Rob Watson.
A recent Israeli study by a research group with close ties to Israel's defence establishment said Hamas was currently engaged in the broadest and most significant military build-up in its history.
Some generals argue a major Israeli incursion will eventually be needed to prevent Hamas growing even stronger militarily.
But they also fear the possible consequences of a lengthy campaign in the crowded cities and refugee camps of Gaza, our correspondent says.
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