Here's the latest on the situation from AlJazeera:

Fresh Israeli air raids have killed at least eight Palestinians in the Gaza Strip and wounded dozens more, medics say, with Palestinian security sources confirming that at least three of the dead were Hamas fighters.

Israel on Saturday expanded its fierce air assault on rocket operations, striking Hamas government and security compounds, tunnels and electricity transformers after an unprecedented rocket attack on Friday aimed at the holy city of Jerusalem raised the stakes.

The Israeli army said that four of its soldiers were injured by a rocket fired from Gaza. Meanwhile, a newly installed battery of Israel's Iron Dome defence system successfully intercepted a Gaza rocket aimed at Tel Aviv on Saturday.

Palestinian medics said 40 Palestinians have been killed and 345 wounded since Israel launched the aerial campaign against the Palestinian enclave on Wednesday.

In the same period, three Israelis have been killed and 18 injured, including 10 soldiers.

Since the start of its operation, Israel's army said it carried out some 700 airstrikes. It also said that fighters have fired more than 580 rockets over the border, 367 of which hit southern Israel, and 222 of which were intercepted by the Iron Dome anti-missile system.

Also now at AlJazeera, breaking news banners read "Israeli air strike hits main gaza police headquarters and prime minister ismail haniyeh's office," and "Israeli cabinet approves plan to call up 75,000 reserve soldiers as air strikes continue on the gaza strip," with no further details as yet.

An update this morning on the situation: Hamas launched a rocket into Jerusalem on Friday, the first time the current conflict with Israel has expanded outside of Gaza. Israeli media said the rocket landed outside the city and there were no causalities. A ceasefire Friday between Israel and Hamas collapsed after just three hours when Palestinians continued launching rockets over the border, and Israel resumed airstrikes in retaliation. The ceasefire had been planned for Egyptian Prime Minister Hesham Qandil’s visit to Gaza. The Israeli military also announced Friday morning that it was calling up 16,000 reservists for a potential ground operation. More on this from the Washington Post.
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Israel is continuing to pound the Gaza Strip with air strikes amidst fears that Israel could soon launch a ground invasion into Gaza. Israeli troops, tanks and armored personnel carriers are now massing near the Palestinian territory. Earlier today, 85 missiles exploded within 45 minutes in Gaza City, sending black pillars of smoke. At least 21 Palestinians have died in the most recent round of violence, while three Israelis died on Thursday. Israel said it launched 150 air strikes overnight, while Palestinians fired a dozen rockets into Israel. Israel has started to draft 30,000 reserve troops in a sign the assault may soon widen. Among the casualties of Israeli violence was the 11-month-old son of a BBC Arabic journalist, Jihad Misharawi. Egyptian Prime Minister Hisham Kandil traveled to Gaza today to condemn the Israeli attack. For more, Democracy Now! gets a report from Rafah by Palestinian journalist Mohammed Omer, who says, "One thing that we ought to talk about here is the humanitarian situation in the Gaza Strip. This is a situation of targeting a population of civilians, exactly like Israel is shooting in a fishbowl. And there is no shelter, and there is nowhere to run for the general population. Gaza is living in a very dire situation." Amy Goodman of Democracy Now! also speaks with Gershon Baskin, the founder of the Israel/Palestine Center for Research and Information, who was the initiator of the secret talks between Israel and Hamas for the release of Israeli soldier Gilad Shalit.

A rush transcript follows below the fold.

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