Israel declared "all-out war" against Hamas, pummeling the Gaza Strip from the air for the third day. But even as deaths of Palestinian militants and civilians rose, Hamas responded with its strongest rocket barrage since the Israel attacks began.

Gaza's skies Monday were buzzed by unmanned Israeli drones and fighter jets as the death toll reached at least 320 including 62 civilians, according to United Nations officials, with at least 1,400 more wounded. Among other targets, Israel flattened the Palestinian Interior Ministry...