Gaza Toll Rises Above 350 in Third Day

Israel's blistering attack against Hamas leaders and institutions in the Gaza Strip intensified Monday, as airstrikes continued along the Israeli-Palestinian border. The Israeli government escalated its rhetoric, when Defense Minister Ehud Barak called for an "all-out war" to "the bitter end against Hamas and its branches."

Three days of continual Israeli air strikes against targets throughout Gaza have brought the Palestinian death toll above 350, according to Palestinian officials, with more than 1,400 injured.

The United Nations reports at least 50 of those killed were civilians, but the director of a Gaza Strip hospital told ABC News the civilian death count stands at more then 120, including 21 children.

The lame duck Bush administration today again spoke out on the Israeli assault of Hamas targets throughout Gaza, condemning Hamas for the escalation of violence in the past three days.

VIDEO: Israeli airstrikes against Hamas in Gaza.Play
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"In order for the violence to stop, Hamas must stop firing rockets into Israel and agree to respect a sustainable and durable cease-fire," White House spokesman Gordon Johndroe said in a statement this morning. "That is the objective to which all parties need to be working. That is what the United States is working towards."

But so far, the strikes have only slowed but not stopped the weeks-long string of Hamas' rocket attacks inside Israel that triggered the attacks.

In the southern city of Ashdod, 18 miles from Gaza, a rocket fired by Gaza militants killed two Israelis Monday, including a woman who was taking shelter in a bus station. The attack brought the number of Israelis killed by Palestinian rockets to four since Saturday.

Throughout southern Israel, thousands panicked and were sent into shelters by the roaring sound of the code red alert. In Sderot today, the Kol family ran for cover outside their home when an incoming rocket was spotted.

Across the border in Gaza, as the panic persists, the cost of war for the Baloshe family has already been unbearable. Sunday night an Israeli strike caused a wall to collapse in their home, crushing five of their daughters to death.

"I wasn't firing rockets," Anwar Baloshe, a Palestinian father, said. "I was just asleep with my children."

Baloshe carried his 4-year-old daughter, Muna, back to the site of her death Monday. As she was buried, the sound of an Israeli jet roared above.

Hamas Hits Israel

Overnight, a handful of Hamas rockets were fired at southern Israeli cities, but the pace picked up as the day wore on. A spokesman for the Israeli Defense Forces told ABC News that Hamas had fired a total of 40 rockets at Israel today. One rocket -- a Palestinian Grad -- struck a building under construction in the southern Israeli city of Ashkelon, killing an Israeli Arab worker and injuring 14 others.

In Sderot ABC producer Bruno Nota reported that four rockets came down as he entered the city.

Still, the pace of Hamas rockets is well below previous days. There were 120 rockets fired at Israeli cities on Saturday, but on Sunday, some 80 rockets were fired, Israeli officials said.

The Israeli military said its bombing operations continued overnight. In a statement, the IDF said it had struck "dozens of Hamas-related targets, including weapons manufacturing and storage facilities, posts, tunnels, launching grounds and warehouses."

Israeli forces then struck the office of Hamas Prime Minister Ismail Haniyeh, who was reportedly not there at the time. The IDF also hit what it termed "laboratories" to develop and manufacture weapons at the University in Gaza, and Israeli naval forces struck at what officials called "Hamas vessels and posts, and reported accurate hits." According to an IDF spokesperson, Israeli forces made 15 airstrikes into Gaza today.

Citing concerns over weeks of Hamas rocket attacks, Israel's defense forces have now declared a two-mile area along the Gaza border a closed military zone, arousing concern that Israel may be stepping up ground operations already under way on the Israeli side of the border.

Speaking at a special session of parliament today, Ehud Barak, Israel's defense minister said the country is engaged in a "war to the bitter end" against Hamas in Gaza but declined to give details of how far that war would go to stop Hamas rocket attacks.

An 'Extreme Islamic Ideology'

Israeli Foreign Minister Tzipi Livni told ABC News that "Hamas represents an extreme Islamic ideology. They are not fighting for Palestinian rights -- they are to deny us our right to exist."

In Gaza, conditions have worsened for its 1.5 million residents. The territory's nine hospitals report they are overwhelmed by the wounded. Palestinian residents dig through the rubble trying to find and free survivors. On Gaza's southern border, Egypt shut its crossing after thousands of Gazans tried to escape the fighting and breached the border wall.

The United Nations Relief and Work Agency spokesman said today that 66 of the dead in Gaza were civilians (women and children under the age of 18). The agency described the figure as "conservative" and said the numbers were likely to rise. The U.N. agency added that nine of its staff members were injured in the attacks.

On Sunday, U.N. Secretary-General Ban Ki Moon called for all sides to cease hostilities, saying he "deplores that violence is continuing today, and he strongly urges once again an immediate stop to all acts of violence."

Israel has allowed more than 100 U.N. trucks to take food, fuel and medical supplies to Gaza over the next 36 hours. But there is little indication that this aid will improve the conditions in Gaza anytime soon. A U.N. Relief and Work Agency spokesperson told ABC News that even though the agency has "the capacity to distribute food commodities [to] up to 20,000 refugees per day," the catch remains that "the flour -- if and when it enters Gaza -- needs to be milled and parceled," an operation that could take several days.

Oil prices have gone up in the days since Israel started retaliating against the Hamas rocket attacks from Gaza. Traders are betting that a war in the Middle East could force supply disruptions from the region and affect prices Americans pay at the pump. The price of a barrel of crude rose $2.31 to $40.02 today.