Israel had earlier accepted an Egyptian ceasefire proposal and halted operations in the morning. But the armed wing of Hamas rejected the initiative as a “surrender”.
Palestinian officials said at least 193 people have been killed in eight days of Israeli airstrikes. Israel yesterday reported its first fatality, a 38-year-old man killed by a mortar shell fired from Gaza while he was delivering food to soldiers.
Prime minister Benjamin Netanyahu last night said Israel had “no choice” but to step up its operations. He said: “Hamas chose to continue fighting and will pay the price for that decision. When there is no ceasefire, our answer is fire.”
The Israel Defence Force said 30 targets had been attacked in Gaza after airstrikes resumed.
Under the terms of the Egyptian initiative, the ceasefire should have been followed by a series of meetings in Cairo with high-level delegations from the two sides.
But Hamas dismissed the initiative, saying its battle with Israel would “increase in ferocity and intensity”.
US secretary of state John Kerry said he could not “condemn strongly enough” Hamas’ actions in continuing to fire rockets into Israel.
Middle East Quartet envoy Tony Blair said it was inevitable Israel would retaliate in the face of the continued rocket fire.
He said: “There’s no Israeli leader that would survive the day unless they were prepared to take action.”
Hamas believes it has little to lose by continuing to fight, while a truce on unfavourable terms could further weaken its grip on the Gaza Strip, a territory it seized in 2007 after battling rival Palestinian group Fatah.
The Egyptian plan asked both sides to halt hostilities without pre-conditions and then to try to negotiate a new border regime, easing the blockade of Gaza, with Cairo’s mediation.
Hamas wants a significant easing of the blockade, enforced by Israel and Egypt by varying degrees since 2007. Egypt tightened the closure over the past year by shutting smuggling tunnels that were crucial for Gaza’s economy, pushing Hamas into a severe financial crisis.
Speaking on Lebanese TV, Moussa Abu Marzouk, a senior Hamas official, said: “The siege on Gaza must be broken and the people of Gaza should live freely like other people of the world.
“There should be a new equation so that we will not have a war on Gaza every two years.”
Israel wants a deal that will ensure a halt to rocket fire from Gaza, but it is not clear what concessions it might be willing to make on the border closure.
Israel agreed to the Egyptian plan, proposed late on Monday, and for about six hours yesterday complied with an Egyptian call for de-escalation. But after the continued rocket fire from Gaza, Israel resumed airstrikes.
After the renewed rocket fire from Gaza, Mr Netanyahu and Israeli defence minister Moshe Yaalon “directed the military to act with intensity against terror targets in Gaza,” an official said.
A senior Israeli military official last night said that even though Israel resumed bombing Gaza, it would stop if Hamas accepts the truce and that the coming hours are critical. But if not, the military has a plan in place to significantly amp up its offensive, including a possible ground operation.
Israel has warned in the past that it might launch a ground offensive in Gaza and has amassed thousands of troops on the border. However, entering Gaza would probably increase casualties on both sides. Israel has often hesitated in the past to embark on ground operations for fear of getting entangled in the densely populated territory of 1.7 million.
The fighting, which began on 8 July, has been the deadliest since a major Israeli military offensive in the winter of 2008-9.
The most recent outbreak of cross-border violence, in 2012, eventually ended with the help of Egypt.