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Netanyahu said Israel was ready to widen its offensive.
“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,” he said at a cabinet meeting, giving no further details.
Gaza health official Mufid al-Miklalati said 65 Palestinians - around half of them women and children - have been killed in small, densely populated Gaza began, with hundreds wounded.
More than 500 rockets fired from Gaza have hit Israel since Wednesday, killing three civilians and wounding dozens.
Israel’s declared goal is to deplete Gaza arsenals and force the Islamist Hamas to stop rocket fire that has bedevilled Israeli border towns for years and is now displaying greater range, putting Tel Aviv and Jerusalem in the crosshairs.
Israel withdrew settlers from Gaza in 2005 and two years later Hamas took control of the impoverished enclave, which the Israelis have kept under blockade.
OBAMA CAUTIONS AGAINST GROUND CAMPAIGN
At a news conference during a visit to Bangkok, Obama said Israel has “every right to expect that it does not have missiles fired into its territory”.
He added: “If this can be accomplished without a ramping up of military activity in Gaza that is preferable. That’s not just preferable for the people of Gaza, it’s also preferable for Israelis because if Israeli troops are in Gaza they’re much more at risk of incurring fatalities or being wounded,” he said.