UPDATE 3: Israeli air strikes continue after Hamas breaks 6-month truce.
Israeli warplanes have hammered Hamas targets in the Gaza Strip in retaliation for rocket fire, killing at least 228 people in one of the bloodiest days of the decades-long Middle East conflict.
Israeli Defence Minister Ehud Barak said "Operation Cast Lead" against the Islamist movement, which has also left some 700 wounded, will continue "as long as necessary.
"The battle will be long and difficult, but the time has come to act and to fight," he said.
Exiled Hamas leader Khaled Meshaal called in Damascus for a new Palestinian intifada, or uprising, against Israel and promised new suicide attacks.
Following mid-morning bombings, in which some 60 warplanes struck more than 50 targets in just a few minutes, Hamas fired more than 70 rockets and mortars into Israel killing one person and injuring four, according to a new Israeli army toll.
Israeli air strikes continued sporadically throughout the day and into the night.
Two Hamas members were killed in an Israeli helicopter raid in eastern Gaza City while they were preparing to fire more rockets into Israel, a medical source said.
Two other Palestinians were wounded in that late Saturday attack, as Israeli helicopters also targeted four metals factories in the city where rockets are believed to be stored or built.
A mosque near the Al-Shifa hospital in Gaza City was damaged when Israeli air-ground missiles targeted two Hamas policemen standing near its doors. Both men were injured, witnesses said.
"We will not stand down and we will not cave in even if (the Israelis) should eradicate the Gaza Strip or kill thousands of us," Ismail Haniya, who heads the Hamas government, said in a defiant radio address.
Meshaal called for a "military intifada against the enemy" and said "resistance will continue through suicide missions."
Hamas has not carried out a suicide attack in Israel since January 2005.
He said that for there to be any talks with the people of Gaza, "the blockade must be lifted and the crossings [from Israel] opened... notably that in Rafah," which leads to Egypt.
Israel imposed a blockade after Hamas seized power in Gaza last year, but let in dozens of truckloads of humanitarian aid on Friday.
The White House said only Hamas could end the cycle of violence by putting a stop to the rocket fire on Israel.
"These people are nothing but thugs, and so Israel is going to defend its people against terrorists like Hamas," spokesman Gordon Johndroe said at George W. Bush's Texas ranch, where the president is preparing to spend the new year.
"If Hamas stops firing rockets into Israel, then Israel would not have a need for strikes in Gaza," Johndroe said. "What we've got to see is Hamas stop firing rockets into Israel.
"The United States holds Hamas responsible for breaking the ceasefire; we want the ceasefire restored. We're concerned about the humanitarian situation and want all parties concerned to work to make sure the people of Gaza get the humanitarian assistance they need," said Johndroe.
He was referring to a six-month truce mediated by Egypt, which ended on Dec. 19, with Hamas refusing to renew it.
Prime Minister Ehud Olmert pledged Israel will do its utmost to avert a humanitarian crisis in Gaza.
"The people in Gaza do not deserve to suffer because of the killers and murderers of the terrorist organisation," he said, referring to Hamas.
He insisted that Israel had only hit Hamas targets, including command structures and rocket-manufacturing installations.
UN chief Ban Ki-moon called for an immediate halt to the violence, as did the European Union, Russia, Britain and France, while several Middle Eastern states and the Arab League slammed Israel.
Members of the UN Security Council were set to hold consultations late Saturday, a UN spokesperson said, adding it was unclear if there would also be a formal meeting.
The Arab League will hold an extraordinary summit in Doha on Jan. 2 to discuss the crisis, diplomats in Cairo said.
In Gaza, thick clouds of smoke billowed into the sky. Mangled, bloodied and often charred corpses littered the pavement around Hamas security compounds, and frantic relatives flooded hospitals.
Medics said civilians had been hit, but the majority of the victims appeared to be members of Hamas, branded a terror group by Israel and the West.
Hamas said the strikes destroyed its security structures across Gaza and killed three senior officials -- the Gaza police chief, the police commander for central Gaza and the head of the group's bodyguard unit.
Dr Moawiya Hassanein, the head of Gaza emergency services, put the toll at 225 dead and 700 injured, 140 of them seriously.
Later, a medical source added three more to the toll with witnesses saying that two of them died in the east of Gaza City while they were preparing to fire rockets towards Israel.
The bombing came after days of spiralling violence, with militants firing rockets and Israel vowing a fiery response.
Egyptian President Hosni Mubarak , who brokered the six-month truce, slammed the "Israeli military aggression on the Gaza Strip" and blamed "Israel, as an occupying force, for the victims and the wounded."
The bombardment set off angry demonstrations in Israel's Arab towns and in the Israeli-occupied West Bank, as well as protests in countries around the region.
It came less than two months ahead of Israeli elections on Feb. 10.
Foreign Minister Tzipi Livni, the head of the governing Kadima party and one of the front-runners for the premier's chair, said that "today there is no other option than a military operation."
Violence in and around Gaza has flared since the truce ended, and it escalated dramatically on Wednesday.