Hamas militants have launched another series of rocket attacks at Israel after one of the group's commanders in Gaza was killed in an airstrike.
Bassem Issa, one of Hamas's most senior leaders, was killed overnight by Israeli forces as some of the worst violence in the region since the 2014 war continues.
At least 67 people in Gaza and seven in Israel have been killed since violence flared on Monday.
US President Joe Biden said he backs Israel's right to defend itself but hoped attacks would end "sooner rather than later" - and he announced an envoy would be sent to try to de-escalate the situation.
So far the violence, which the UN says risks "escalating towards a full-scale war", has killed at least 65 people in Gaza.
According to the Palestinian Ministry of Health, the Palestinian death toll includes 16 children, plus another six within Israel, and five women. A further 365 people have been wounded.
Five civilians have been confirmed dead in Israel and more than 200 have been injured.
Muslims celebrating Eid al-Fitr in the region were urged to mark communal prayers inside their homes or the nearest mosques and avoid being out in the open.
Russian media has reported a Hamas official saying it is willing to halt fighting on a mutual basis.
But Lieutenant Colonel Jonathan Conricus of the Israeli Defense Forces (IDF) has told Sky News that the missile fire is set to continue for now.
James Cleverly, the UK's Middle East and north Africa minister, told Sky News Britain and its international partners would "work together and use diplomatic efforts to bring this to a conclusion".
He added: "No-one is pretending this is a simple situation - it is sensitive and it is complicated, but we will use every effort to get back to co-operation and to peace."
And while he agreed Israel had a right to defend and protect its people he said the UK expected the nation to make "every effort to minimise civilian casualties and abide by international humanitarian law".
His warning came after an Israeli airstrike collapsed a 13-storey office block in Gaza City.
Israeli forces say Hamas intelligence officials were inside, and they fired a series of warning shots an hour before the strike, but there are claims fighter jets also targeted, without warning, multiple residential buildings, located in teeming neighbourhoods.
Gaza is a crowded coastal enclave of two million people.
Hamas leader Ismail Haniyeh warned Israel: "If they want to attack - the resistance is ready."
UN Security Council officials are due to meet in New York to discuss the situation.
As well as airstrikes, in another alarming development, rioting and civil unrest has broken out in several "mixed" Israeli cities.
These are cities within Israel, rather than the West Bank, where Israeli Jews live alongside Israeli Arabs.
In a number of towns including Acre, Nazareth and Lod, Israeli Arabs protested in support of Palestinians who are considered under international law to be occupied by Israel.
A state of emergency has been declared in Lod amid clashes between Israeli Arabs and Israeli Jews.
British Airways cancelled its flight from London to Tel Aviv on Thursday, saying: "The safety and security of our colleagues and customers is always our top priority, and we continue to monitor the situation closely."
How the situation re-ignited:
The violence began last weekend at the al Aqsa mosque, the third-holiest site in Islam and the holiest site in Judaism.
In a highly provocative move Israeli police entered the mosque and threw stun grenades inside.
Palestinians were also angry at an Israeli police decision, at the start of Ramadan, to barricade the seating area outside Jerusalem's Damascus Gate.
That violence followed many months of ever-increasing frustration by Palestinians, with Jewish settlers expanding at unprecedented levels into the occupied West Bank and East Jerusalem.
There is also the issue of Sheikh Jarrah, the East Jerusalem neighbourhood where Palestinian families are fighting a court battle with Jewish settlers who want to take their homes, claiming the land is historically theirs.
And last month, Human Rights Watch released a major report accusing Israel of a process of apartheid over the Palestinians.
Israel captured East Jerusalem in 1967 and annexed it as their own, but most of the international community considers it to be occupied land.
In a culmination of all recent events, on Monday evening Hamas began firing rockets from Gaza towards Jerusalem and the conflict escalated rapidly.
Source: Sky News