Thousands of Gazans scrambled to flee the city after Israel issued an evacuation warning and conducted a brief ground raid overnight on Hamas rocket-launching sites, as part of a widening operation that has left 160 Palestinians dead.

In the early hours of Sunday, the Israeli Defense Force deployed troops to Gaza to raid a long-range missile-launching site, during which four Israeli soldiers were lightly wounded in the ensuing exchange of fire, an IDF spokesman said.

It is not clear whether the raid is part of a wider ground offensive, which Israel is hesitant to launch, despite amassing troops and tanks on the outskirts of Gaza.

Later on Sunday morning, the Israeli army began dropping leaflets ordering some 100,000 north Gazan residents to leave before the IDF conducted what it described as a "short and temporary" campaign.

"Those who fail to comply with the instructions will endanger their lives and the lives of their families. Beware," one leaflet dropped in the town of Beit Lahiya, close to the Israeli border read, according to Reuters.

A spokesman for the United Nations agency responsible for assisting Palestinian refugees said around 4,000 people fled Beit Lahiya on Sunday and crowded into eight schools converted into temporary shelters.

Some of the 800 Palestinians in the area holding foreign passports from countries including the US, UK and Australia, are also making moves to escape through the Erez border crossing, with Israel's cooperation.

Undeterred by international pressure to negotiate a ceasefire, neither side shows signs of abating retaliatory rocket attacks amid the heaviest fighting the region has seen in over two years.

The escalating violence comes the week after three Israeli settler teens missing for 18 days were found murdered in the West Bank, after which a 16-year-old Palestinian boy was burned to death in Jerusalem in an apparent revenge killing.

As Israel's military campaign, dubbed "Operation Protective Edge," advanced into its sixth day, Israeli Prime Minister Benjamin Netanyahu said, "We don't know when the operation will end… It might take a long time."

On Saturday, Israel expanded its airstrike operation to include suspected Hamas targets concealed within civilian sites.

In one attack, two disabled women were killed and four others wounded after an Israeli rocket blitzed a mosque that doubled as a rehabilitation center, now a pile of rubble located in an eastern neighborhood of Gaza City.

Later on Saturday, 18 more died and five were injured when an Israeli strike targeting Gaza police chief, Taysir al-Batsh's home, also partially damaged a nearby mosque.

Both sites are among over 1,300 targets that have been struck in several weeks in an effort to curb the nearly 800 rockets that have already been fired at Israel by militants, the IDF said.

Israel claims Hamas are knowingly endangering Palestinians by concealing their weapons in religious and other civilian sites and hiding in densely populated residential areas.

Meanwhile, Hamas continued to fire rockets deep into Israel and announced further concentrated attacks on Tel Aviv over the weekend.

On Saturday night, video uploaded to social media captured Israel's "Iron Dome" defense system intercepting three rockets over Tel Aviv, hours after Hamas's Qassam Brigades televised a warning to Israelis to seek safety an hour ahead of planned rocket fire.

Another rocket exploded in an open area near Rishon LeZion, the IDF said.

Later, footage emerged of Palestinians in Hebron celebrating Hamas's rocket attacks.

Israel has suffered no fatalities so far, in part due to the joint US-Israeli accomplished rocket defense system, which has intercepted over 130 missiles over the last 24 hours alone, although several Israelis have been wounded from rockets that have slipped through.

Netanyahu remained vague when asked whether Israel would consider a broader ground offensive this time round, saying only, "We are weighing every possibility."

The last ground invasion of Gaza in 2008-09 lasted three weeks during which time 1,400 Palestinians and 13 Israelis were killed.