The death toll in Gaza continued to rise on Thursday as Israel's strikes against Hamas intensified, while residents in Tel Aviv awoke to explosions as rockets were shot down over the city by the Iron Dome defence system.

Reports claimed that eight members of the same family – including five children – were killed in an air strike on two homes in Khan Younis, south of Gaza.

A spokesman for the Gazan health ministry told Palestinian media that no warning was given and that most of the dead were children. Ashraf al-Qidra said the total number of Palestinians killed over the past three days now stands at 77, with over 500 people injured in the tiny coastal strip. There have been no Israeli casualties from the hundreds of rockets that have been fired by militants in Gaza.

There are also claims that a missile was fired at a cafe in Khan Younis late on Wednesday night, where dozens were gathered to watch the World Cup game between Argentina and Holland – with six dead and 15 injured, according to AFP.

The Israeli defence forces said in a statement that it had targeted hundreds of sites in Gaza and killed three Islamic Jihad militants. "We aimed at 322 targets in Gaza overnight, taking to 750 the total number of Hamas targets hit by the army since the start of Operation Protective Edge," Lt Col Peter Lerner told reporters.

The Israeli prime minister, Binyamin Netanyahu, has refrained from launching a ground offensive on the strip, which was expected after tens of thousands of reserve soldiers were called up earlier this week. But he has defended the IDF's actions in Gaza despite significant civilian casualties.

Palestinian children inspect damage from Israeli air strikes in the Gaza Strip. Photograph: Yasser Qudih/NurPhoto/Corbis

In a statement on Wednesday, he said: "Hamas and other terrorist groups in Gaza are firing rockets on cities throughout the state of Israel – on Tel Aviv, Jerusalem, Haifa, Beer Sheba, Sderot and other cities in Israel. No country on earth would remain passive in the face of hundreds of rockets fired on its cities and Israel is no exception."

He appeared to acknowledge the civilian casualties but claimed that the deaths were due to Hamas using Gazans as human shields, rather than the indiscriminate Israeli bombardment claimed by those in Gaza.

"(Hamas) embeds its terrorists in hospitals, schools, mosques and apartment buildings throughout the Gaza Strip. Hamas is thus committing a double war crime: it targets Israeli civilians, while hiding behind Palestinian civilians," he said.

But international pressure is mounting as the death toll rises. The UN security council is due to hold an emergency meeting on the crisis. The secretary general, Ban Ki-Moon, said on Wednesday that "Gaza is on a knife-edge" as he urged Israeli restraint, as well as a halt to rocket fire from Hamas and other Palestinian militant groups.

"The deteriorating situation is leading to a downward spiral which could quickly get beyond anyone's control. The risk of violence expanding further still is real. Gaza, and the region as a whole, cannot afford another full-blown war."

Many have been surprised by both the quality and quantity of Hamas rockets, which have been shot down as far north as Hadera, more than 100km from Gaza. In Jerusalem, the city council has opened hundreds of bomb shelters across the city, after four rockets were intercepted over the city on Tuesday night.

But many have remained unused for years. Following tweets to the mayor's account identifying locked shelters, the city council has used the information to send out teams to improve them.