Israeli forces continued attacks on Sunday after killing 61 Palestinians in a land and air blitz in the Hamas-held Gaza Strip on Saturday, amid warnings that the violence had "buried" the peace process.
It was the deadliest day since Israel's withdrawal from Gaza in September 2005 and one of the most lethal Israeli operations since the Palestinian uprising erupted in 2000.
The UN Security Council went into emergency session late Saturday to weigh a Libyan draft resolution slamming the Israeli incursion in the Gaza Strip and urging an immediate end to all violence.
Acting at the request of Palestinian president Mahmud Abbas after the Israeli assault on besieged Gaza, the 15-member body held closed-door consultations which were to be followed by an open debate.
Israeli warplanes early Sunday attacked the offices of Hamas chief Ismail Haniya in Gaza City, destroying the empty offices and wounding several people in neighbouring buildings, witnesses said.
Fifty-four Palestinians were killed Saturday in northern Gaza, and two others in an air strike in the south of the territory which is ruled by the Islamist movement Hamas, medics said.
At least 13 civilians, seven of them women and including children, were among the dead and more than 150 people were wounded, Dr Muawiya Hassanein, the head of Gaza emergency services, told AFP.
Five members of the Hamas "police" were killed in an Israeli air strike in the Rafah sector as they took shelter in a mosque that was hit by a missile, witnesses and medical sources in southern Gaza said.
Two Israeli soldiers were also killed on Saturday in Gaza, and another seven soldiers wounded, including one officer, the army said, as it battled to halt Palestinian rocket attacks on towns in southern Israel.
Senior Palestinian negotiator Saeb Erakat said the Middle East peace talks formally revived in November at a US conference had been "buried" under the rubble of the Israeli incursion.
"The negotiations are buried under the houses that were destroyed in Gaza," Erakat told AFP. "The peace process has been destroyed because of the aggressions and the crimes that have been committed."
A member of Abbas's office told AFP that the talks were now suspended. "The president decided to suspend the negotiations as a protest to the Israeli aggression," he said, declining to be named.
Following the decision, the Palestinian president cancelled a meeting scheduled this week with Israeli Prime Minister Ehud Olmert, as well as meetings between Palestinian and Israeli negotiators, the source said.
As his spokesman warned that the operation would be open-ended, Israel's Defence Minister Ehud Barak said Hamas which seized power in Gaza in June bore "full responsibility" for the bloodshed.
"Hamas bears full responsibility and will pay the price. We are not happy that civilians have been victims but the responsibility is on Hamas and its firing of rockets at Israel," Barak said in a statement.
Israeli tanks supported by helicopters moved into northern Gaza just after midnight on Friday and by nightfall troops had fought their way nearly three kilometres (two miles) inside the Strip, according to witnesses.
Israel's public television reported that the army, which suffered its first deaths since the violence escalated on Wednesday, had deployed an "entire regiment," in Gaza, which would number around 2,000 soldiers.
The urban battlefields were littered with debris as frightened Gazans hid inside their homes and imams read Koranic verses over mosque loudspeakers.
The latest operation raised the death toll to 91 since Wednesday.
Abbas, whose Fatah forces were driven out of Gaza when Hamas seized power, urged "international protection for the Palestinian people", in an appeal from the West Bank city of Ramallah.
In Damascus, exiled Hamas political supremo Khaled Meshaal angrily accused Abbas of providing Israel with "a cover, voluntarily or involuntarily", to carry out its assault.
Since the peace talks were formally relaunched more than three months ago at least 296 people have been killed, the vast majority of them Gaza militants, according to an AFP count.
At least 20 militants were killed in Saturday's operation, most of them from Hamas, medics said. A bodyguard of Haniya, the Hamas premier dismissed by Abbas, was among the militants killed.
But Gaza militants still fired at least 40 rockets and mortars at southern Israel, including eight long-range rockets which crashed in and around the town of Ashkelon, 11 kilometres (seven miles) north of Gaza, the army said.
Six Israelis were wounded by the rockets that fell on Ashkelon, one of them seriously, it added.
The United States called for an end to violence in the Israel-Palestinian conflict but said Israel had a right to defend itself, a national security spokesman said.
The Gulf Arab states, other Arab countries and Iran condemned the Israeli operation, along with France which also called for a halt to Palestinian rocket attacks. Canada deplored the escalation in violence.
The latest deaths brought to at least 6,257 the total number of people killed in Israeli-Palestinian violence since 2000, most of them Palestinians, according to an AFP count.