Netanyahu says Israel is ready to widen military operations after rockets and gunboats bombarded Gaza targets on Sunday, killing 11 people in an apartment building in a bloody day of conflict.

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While Israeli officials maintain no decisions have been made on a ground offensive, 75,000 troops have been mobilised.

"We are exacting a heavy price from Hamas and the terrorist organisations and the Israel Defence Forces are prepared for a significant expansion of the operation," Prime Minister Binyamin Netanyahu said at a cabinet meeting on Sunday, providing no further details. President Barack Obama on Sunday stressed the US's continuing support of Israel.

The number of deaths since the latest round of violence began on Wednesday is believed to be about 60 after an Israeli air strike on a Palestinian apartment building. Eleven people, including six children, are believe to have died, but rescue workers were still searching for people who might be buried under the rubble on Sunday evening. A prominent Hamas fighter lived in the buliding. Hamas's armed wing warned in a statement that the deaths would not pass without punishment.

At least 1,000 have been wounded in attacks.

Two Gaza City media buildings were hit overnight, wounding six journalists and damaging facilities belonging to Britain's Sky News and Hamas's Al-Aqsa TV, witnesses said. A cameraman for Beirut-based al Quds television station lost his leg, medics and journalists reported.

While Israel admitted it knew journalists were in the two buildings, it maintained they were not the intended target. An Israeli military spokeswoman said the strike target was a rooftop "transmission antenna used by Hamas to carry out terror activity".

"Of course, Israel knew what these building were and targeted them specifically" Channel 4 Chief Correspondent Alex Thomson wrote in his blog today from Gaza. "In the past the US have hit journalists in a number of conflicts in recent years from Baghdad to Belgrade. Now add to that list Israel."

Palestinians have returned Israeli fire with rockets targeting Israel's commercial capital Tel Aviv. More than 500 rockets fired from Gaza have hit Israel, killing three civilians and wounding dozens. Falling debris from one interception reportedly hit a car, which caught fire. Its driver was not hurt.

Israel said two missiles headed for Tel Avid were shot down by Israel's Iron Dome air shield.

US in talks with Israel

"We will continue to support Israel's right to defend itself," US President Barack Obama said on Sunday, but he added that the US was actively working with Israel, Egypt and Turkey to see if a resolution could be reached.

The president plans to review what progress has been made in the next 24-48 hours on resolving the conflict.

"Israel has every right to expect that it does not have missiles fired into its territory. If that can be accomplished without the ramping up of military activity in Gaza, that is preferable," Mr Obama said.

"Those who champion the cause of the Palestinians should recognised that if we see a further escalation of the situation in Gaza then the likelihood of us getting back on any kind of peace track that leads to a two-state solution is going to be pushed off way into the future."

Egypt hopeful for ceasefire

"There are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees," Egyptian President Mohamed Mursi said in Cairo. Egypt has mediated previous ceasefire deals between Israel and Hamas.

A Palestinian official told Reuters the truce discussions would continue in Cairo on Sunday, saying "there is hope", but that it was too early to say whether the efforts would succeed.

Israel unleashed intensive air strikes on Wednesday, killing the military commander of the Islamist Hamas movement that governs Gaza and spurns peace with the Jewish state.

Israel's declared goal is to deplete Gaza arsenals and press Hamas into stopping cross-border rocket fire that has bedevilled Israeli border towns for years and is now displaying greater range, putting Tel Aviv and Jerusalem in the crosshairs.