Israeli ground forces began pushing into densely-populated Gaza City on Thursday, while artillery pounded Hamas targets in the city center.
According to Palestinian sources cited by the Associated Press, residents of Gaza City were fleeing in droves before the advancing Israelis, which observers noted should make the army's job of rooting out the terrorists far easier.
On the other side of the fence, 21 missiles from Gaza hit towns across southern Israel on Thursday morning.
Several rockets hit the battered southern town of Sderot, destroying a house and parked cars and damaging a school. A medium-range GRAD missile struck the central Israel town of Gedera some 25 miles from Gaza causing no injuries or damage.