The Gaza Strip is counting its dead and injured after one of the darkest days since the Palestinian intifada began four years ago this week.
Heavy tanks crashed through the camp on Thursday
Israeli tanks swept through Jabaliya refugee camp, sparking off fierce clashes which left 31 people dead and more than 130 wounded across Gaza.
Palestinian civilians and militants and Israeli soldiers and Jewish settlers are among the casualties.
Israeli Prime Minister Ariel Sharon has called for a major offensive in Gaza.
He was responding to a request from Defence Minister Shaul Mofaz for a major, open-ended military operation to stop Palestinian rocket attacks on Israeli border towns, the latest of which killed two small children in Sderot.
The decision has still to be approved by Mr Sharon's security cabinet, due to meet late on Thursday.
The Palestinian Authority called for an urgent meeting of the UN Security Council to debate "barbaric massacres" by Israeli troops in Gaza.
Tanks in the maze
Correspondents said it was the first time in the past four years of the Palestinian intifada that Israeli troops had reached the heart of the densely populated Jabaliya refugee camp.
Israeli forces fought their way into Jabaliya, firing shells and machine-guns as they headed for the militants' stronghold.
Jabaliya is home to around 100,000 people and, with its maze of alleyways and jumble of badly-made buildings, it is said to be one of the most crowded places on earth.
In the worst single incident on Thursday, seven Palestinians including a 12-year-old boy were killed and about 20 wounded by an Israeli tank shell inside Jabaliya.
Palestinian witnesses said they believed that the dead were civilians.
Maj Gen Dan Harel, the Israeli army commander in Gaza, said the shell was aimed at militants who had attacked an Israeli armoured vehicle, injuring three soldiers. He added that he regretted civilian deaths.
Sharon has ordered extra troops into the Gaza Strip
Local people said that at least 17 other Palestinians were killed during the day by Israeli gunfire in the camp, including several militants and a 60-year-old man.
Bulldozers demolished houses, forcing residents to flee, witnesses said.
"A bulldozer entered our living room and demolished half the house," Hussein al-Jamal told the Associated Press news agency. His family fled, along with many of his neighbours.
In other violence on Thursday:
- Hamas militants kill an Israeli soldier at an army base near Jabaliya and lose two of their members to return fire
- Two Israelis - a female jogger and a soldier - were killed in an ambush which also left two Palestinian gunmen dead. The attack happened on a strip of road connecting the Jewish settlements of Elei Sinai and Dugit
The Gaza Strip has been occupied by Israel since it captured the territory in the 1967 war.
Palestinian rocket attacks are complicating Mr Sharon's plans to remove Israeli settlements and the troops that protect them from Gaza, the BBC's Alan Johnston reports.
Militants are keen to portray any eventual Israeli withdrawal as a retreat under fire, and many expect the violence to escalate.
"They [the militants] want to show Israel is running out of Gaza under fire," said Israeli government spokesman Gideon Meir on Thursday.
UN Secretary General Kofi Annan expressed grave concern at the escalation of the violence, adding he particularly "mourned the death and injuries of
In London, UK Foreign Secretary Jack Straw described the Middle East conflict as the greatest challenge to international order.