The deadly exchange of fire between Palestinian militants in the Gaza Strip and the Israeli military has escalated significantly, with the UN fearing a "full-scale war".
More than 1,000 rockets have now been fired by Palestinian militants over 38 hours, Israel said, most at Tel Aviv.
Israel has carried out hundreds of air strikes, destroying two tower blocks in Gaza on Tuesday and Wednesday.
At least 43 Palestinians and six Israelis have been killed since Monday.
That includes 13 Palestinian children caught up in the conflict.
UN Secretary-General António Guterres said he was "gravely concerned" by the ongoing violence.
Children terrified as locals scramble for cover
The latest fatality was an Israeli citizen, who was killed when an anti-tank guided missile, fired from the northern Gaza Strip, struck a jeep on the border. Three other people were injured.
The Israeli fatalities also reportedly include a 52-year-old father and his 16-year-old daughter who died in the city of Lod near Tel Aviv when a rocket hit their car.
In Gaza, the streets are full of rubble where buildings have collapsed and cars are crushed or burned from Israeli air strikes.
Israeli Arabs have also staged violent protests in a number of Israeli towns. Lod near Tel Aviv has been put under a state of emergency.
A man looks at the damage in the aftermath of overnight Israeli airstrikes on Gaza City
The fighting follows weeks of rising tension stoked by violent confrontations between Israeli police and Palestinian protesters at a site in Jerusalem that is holy to both Muslims and Jews.
Of the 1,050 rockets and mortar shells that have now been fired from Gaza, 850 had landed in Israel or were intercepted by its Iron Dome air defence system, and 200 failed to clear the border and landed back in Gaza, the Israeli army said.
Loud booms and air-raid sirens were heard across targeted cities, which included Tel Aviv, Ashkelon, Modiin, and the southern city of Beersheba, as Palestinian militants tried to overwhelm missile defences.
Anna Ahronheim, the defence and security correspondent of the Jerusalem Post, told the BBC: "To hear hundreds of interceptions and even to hear rockets fall near us was horrifying."
The rocket fire escalated after the two residential tower blocks were brought down in Gaza. Israel said it was targeting rocket launch sites, high-rise buildings, homes and offices used by Hamas, the militant group that rules Gaza.
Hamas said it was incensed by "the enemy's targeting of residential towers".
Residents had been warned to evacuate the buildings before the fighter jets attacked, however health officials said there were still civilians deaths.
Israel's Iron Dome anti-missile system fires interceptor missiles as rockets are launched from the Gaza Strip towards Israel
Fady Hanona, a journalist in Gaza City, tweeted a video he said showed explosion after explosion in Gaza on Wednesday morning.
"What is happening is unbelievable," he said. "What we experienced this morning was more war than what we lived during the last three wars."
The international community has urged both sides to end the escalation, amid concerns it could spiral out of control. The UN's Middle East peace envoy, Tor Wennesland, said the sides were "escalating towards a full-scale war".
What makes Jerusalem so holy?
The Israel-Palestinian conflict explained
Are you in Israel or Gaza? Share your experience by emailing [email protected]
Mr Guterres urged "a redoubling of efforts to restore calm".
The chief prosecutor of the International Criminal Court (ICC), Fatou Bensouda, said she was watching the developments with "great concern" and that there might be crimes being committed under the ICC's guidelines, which focus on crimes against humanity.
US state department spokesman, Ned Price said Israel had the right to defend itself but the Palestinian people also had the right to safety and security.