Israel has continued its bombardment of Gaza but failed to stop rocket fire across the border, as the US offered to help negotiate a truce.

At least 98 Palestinians, most of them civilians, have been killed in Israeli bombardment of the Gaza Strip, Palestinian officials said on Friday. Hundreds of others have been wounded.

Among those killed were eight Palestinian family members, including five children, who died in a Thursday morning air raid in Khan Younis, southern Gaza.

Avichay Adraee, a spokesman for the Israeli military to Arab media, on Friday morning said Israel had hit 1,100 targets since its campaign was launched earlier this week.

"There are still hundreds to finish off," he said. "The terrorists continue their rocket attacks because of the painful attacks that aim to destroy their rocket power".

Three people were reported injured in a rocket attack on the Israeli town of Ashdod on Friday morning, one critically, taking those injured by Palestinian fire to five, and no deaths reported.

Israel estimates 550 rockets have been fired from Gaza since Monday.

The clashes and exchange of rocket fire between Hamas and Israeli mlitary has drawn strong reactions from leaders across the globe.

The US president, Barack Obama, meanwhile "called for all sides to do everything they can to protect the lives of civilians".

Ban Ki-moon, the UN secretary-general, condemned the rocket attacks and urged Israel to show restraint.

Al Jazeera's James Bays, reporting from the UN in New York, said it was unlikely the Security Council would release anything more than a "carefully worded statement" on the matter.

Medical officials in Hamas-ruled Gaza said at least 60 civilians, including a four-year-old girl and boy aged five who were killed on Thursday, were among those killed.

In a statement, the Israeli army said it had hit a number of houses that were being used for military purposes.

"These houses may be used for weapons storage, command and control centre, or communications," it said.

The Israeli offensive began after a build-up of violence following the killing of three young Israeli settlers last month and the murder of a Palestinian teenager in a suspected revenge attack.

Israeli leaders said the air offensive could be expanded into a ground invasion of one of the world's most densely populated territories. Some 20,000 reservists have been mobilised, the military says.

"Everyone in Gaza is talking about a ground invasion and people are saying that is the next step," said Al Jazeera's John Hendren, reporting from Gaza.