Moderate Palestinian leaders called the deadly assault Saturday -- which was aimed at Gaza rocket squads but took a heavy toll on civilians -- a "holocaust" and "genocide," and suspended peace talks.
"For the time being, the negotiations are suspended because we have so many funerals," Palestinian negotiator Saeb Erekat told The Associated Press on Sunday. It was unclear when the talks, relaunched last November at a U.S.-hosted summit, would resume.
Israeli Prime Minister Ehud Olmert on Sunday rejected international criticism of the offensive. Israel has recently stepped up its activity in Gaza in response to heavy rocket fire launched from the strip, including several barrages that reached the major city of Ashkelon, some 11 miles north of Gaza.
"If anyone is under the illusion that by increasing the range (of the rocket fire) they'll get us to scale back our operations, he is making a serious mistake," Olmert told his Cabinet. "With all due respect, nothing will prevent us from continuing operations to protect our citizens."
The European Union on Sunday condemned what it called "disproportionate use of force" by the Israeli military in Gaza. It also called for an immediate end to Palestinian rocket attacks on Israeli territory and insisted that the peace process should not be interrupted.
The U.N. Security Council issued a media statement early Sunday condemning the escalation of fighting in southern Israel and Gaza and urging Israelis and Palestinians "to immediately cease all acts of violence."
Overnight, a 14-year-old girl and five militants died of their wounds, and three Palestinians were killed in Israeli raids, bringing the total death toll from the operation to 63. At least half were militants.
Two Israeli soldiers were also killed Saturday.
Health officials said about 200 people were wounded, 14 critically.
The onslaught failed to stop rockets from battering southern Israel. Palestinians fired a steady stream of about 50 rockets and mortars on Saturday. Six Israelis were wounded, all but one of them slightly.