UN humanitarian chief John Holmes said his latest information was that about 320 Palestinians had been killed and 1,400 injured.
"Sixty-two of those killed, we believe... are civilian casualties," he told a news conference.
"That simply encompasses those who are women and children. It does not include any civilian casualties who are men - even though we know that there have been some civilian men killed as well."
Palestinian hospital sources put the death toll higher, with 345 people killed and 1,650 injured.
Israel reported its second fatality, a labourer at a building site in the city of Ashkelon that was hit by a medium-range Grad missile. Three people were seriously wounded in the attack.
Late on Monday, Israeli media reported two more deaths from rocket fire in the space of an hour, at Nahal Oz near the border with Gaza and in the southern city of Ashdod. Several people were injured in the attacks.
Israel says its aim is to end the rocket attacks by Hamas-linked militants - of which there were more than 40 on Monday, the Associated Press news agency said.
Defence Minister Ehud Barak said Israel was not fighting the residents of Gaza, but wanted to deal Hamas a "severe blow". The Israeli operation would be "widened and deepened as needed", he said.
The army's deputy chief, meanwhile, said that there would "not be a single Hamas building left standing in Gaza" after the operation.
Deputy Prime Minister Haim Ramon went further. "The goal of the operation is to topple Hamas," he said.
UN chief Ban Ki-moon called on both Israel and Hamas to "halt their acts of violence and take all necessary measures to avoid civilian casualties".
UN Secretary General Ban Ki-moon has called for an immediate ceasefire
"The suffering caused to civilian populations as a result of the large-scale violence and destruction that have taken place over the past few days has saddened me profoundly," he said.
The US - Israel's strongest ally - says the onus is on Hamas to end the violence and commit itself to a truce.
But there have been angry protests against the Israeli action in many cities across the Arab world and in several European capitals. In Lebanon, tens of thousands of people took part in a demonstration in the capital, Beirut.
The strikes began less than a week after the expiry of a six-month-long ceasefire deal with Hamas, which has controlled Gaza since 2007.
Analysts said Saturday was the single deadliest day in Gaza since Israel's occupation of the territory in 1967. Israel withdrew in 2005 but has kept tight control over access in and out of Gaza and its airspace.
The exiled leader of Hamas, Khaled Meshaal, has called for a new intifada, or uprising, against Israel.
Hamas's advisor on foreign policy, Dr Ahmed Yousef, warned that the Israeli operation could lead to suicide attacks.
"The scale of damage, they're destroying all the government buildings and mosques, schools, amenities," he told the BBC's World Tonight programme.
"When the people look to these crimes and the scale of damage that's happened here, yes, some of the people will go to get revenge."
GAZA VIOLENCE 27-29 DECEMBER
1. Ashdod: First attack so far north, Sunday 2. Ashkelon: One man killed, several injured in rocket attack, Monday 3. Sderot: rocket attacks 4. Nevitot: One man killed, several injured in rocket attack, Saturday 5. Civilian family reported killed in attack on Yabna refugee camp, Sunday 6. Israeli warplanes strike tunnels under Gaza/Egypt border, Sunday 7. Three young brothers reported killed in attack on Rafah, Sunday 8. Khan Younis: Four members of Islamic Jihad and a child reported killed, Sunday 9. Deir al-Balah: Palestinians injured, houses and buildings destroyed, Sunday 10. Interior ministry and Islamic University badly damaged, Monday 11. Gaza City port: naval vessels targeted, Sunday 12. Shati refugee camp: Home of Hamas leader Ismail Hanniyeh targeted, Monday 13. Intelligence building attacked, Sunday 14. Jebaliya refugee camp: several people killed in attack on mosque, Sunday
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