Israeli air strikes on tunnels in Rafah
Israel has made 60 air strikes on the Gaza Strip in a single night after the first daily truce to allow in humanitarian aid expired.
Targets included police sites, 10 Hamas tunnels, weapons storage facilities, launching pads "and a number of armed gunmen", the Israeli army said.
In a dramatic development, at least three rockets reportedly hit northern Israel from the direction of Lebanon.
A BBC correspondent says this is a very dangerous moment in Israel's conflict.
The fear in the past few days has been that the violence in Gaza could spread to northern Israel and the Lebanese border area, Mike Sergeant reports from Jerusalem.
Peace efforts move to Cairo shortly, with an Israeli envoy due in the city.
In addition to the air strikes, Israel's army said that naval and artillery units had "continued to support the ground forces" overnight and reported one soldier lightly wounded.
Palestinian sources say an air attack destroyed a mosque in Gaza City but there has been no independent confirmation of this.
Unconfirmed reports also spoke of a tank advance with helicopter support towards Khan Younis, also in the south, shortly after midnight.
Nearly 700 Palestinian and 11 Israeli lives are said to have been lost since the offensive began 12 days ago.
Israeli security sources have confirmed that senior Israeli defence official Amos Gilad will travel to Cairo on Thursday to discuss ceasefire options.
A Hamas delegation is expected in Cairo at some stage for parallel "technical" talks, Egyptian diplomats said.
Palestinian Authority leader Mahmoud Abbas is expected in the Egyptian capital on Friday.
Israel said on Wednesday it accepted the principles of a Franco-Egyptian truce proposal, which was backed by Washington, but wanted to see the details.
The UN Security Council seemed deadlocked over the crisis.
Arab countries want the Council to vote on a resolution calling for a ceasefire while Britain, France and the US are pushing for a weaker statement welcoming the Franco-Egyptian initiative.
The US could well veto any vote as it is a permanent member of the Security Council, the BBC's Laura Trevelyan reports.
Palestinian health officials say at least 683 Palestinians have been killed and more than 3,085 injured.
Shopping for 'basic needs' in Gaza market
Aid agencies report that Gazans rushed into the streets to buy essential supplies and visit relatives in hospital during Wednesday's pause in fighting.
UN aid workers welcomed Israel's promise of brief daily ceasefires but said only a total end to fighting would allow them to distribute aid to those who need it.
More than 20 rockets were fired into Israel from Gaza during the day.
Israel has lost seven soldiers on the ground to date while rockets have killed four people.
Casualty claims in Gaza cannot be independently verified.
While the BBC has had Palestinian producers reporting from Gaza, Israel only allowed Western TV crews to enter on Wednesday, embedded with its army.