Israel responded to rocket fire from Hamas militants by conducting a massive air strike in the Gaza Strip on Saturday, killing at least 230 people in the highest death toll the conflict has seen in years.

The strikes targeted Hamas rocket compounds and security installations, but Palestinian officials said that at least 15 civilians were killed and 400 more were wounded.

Hamas retaliated by firing even more rockets into Israel, killing one person and injuring at least six others.

As Israeli strikes continued into the early hours of Sunday morning, hundreds of Israeli soldiers rolled towards the Gazan border in advance of a possible land invasion.

Late Saturday, Israeli Prime Minister Ehud Olmert warned that the military operation could rage on indefinitely.

He said the strike aims "to bring about a fundamental improvement in the security situation ... it could take some time."

In Gaza, clouds of black smoke drifted from the destroyed targets, some of them in areas where children had left school -- the Gaza Strip is one of the most densely-populated places on the planet. Parents rushed to the scene, looking for their sons and daughters.

"My son is gone, my son is gone," Said Masri, a 57-year-old shopkeeper, told The Associated Press near a destroyed security compound.

The air strikes began at about 4:30 a.m. ET, according to Â鶹´«Ã½ correspondent Janis Mackey Frayer, and hit about 40 Hamas targets. The assault was a response to days of rocket fire from Gaza into Israeli border towns.

The Israel Defense Forces (IDF) released a statement Saturday, saying the air strikes were a response to the "continuation of terror activity by Hamas terror organization from the Gaza Strip, and the duration of rocket launching and targeting Israeli civilians."

Israeli officials had warned Palestinian militants to stop the attacks, and reports said the IDF had been ready to launch the strike when weather conditions improved.

Speaking to reporters on Saturday, Israeli Defense Minister Ehud Barak warned that "the operation will expand as necessary."

But Palestinian politician Mustafa Barghouti called the Israeli attack a "massacre" that has killed women and children.

He also said the IDF attack simply plays into the hands of Hamas by stoking anger and silencing moderate Palestinians

"Violence will only create violence, attacks will only create attacks," he told Â鶹´«Ã½net in a telephone interview Saturday afternoon.

According to Hamas officials, the air strikes destroyed all of Gaza's security compounds, killing more than a dozen security officers, including Gaza's police chief.

Hospital officials in Gaza said they were having difficulty dealing with the sheer number of wounded.

"We are treating people on the floor, in the corridors. We have no more space. We don't know who is here and what the priority is to treat," one doctor at Shifa Hospital, Gaza's main medical centre, told The Associated Press.

Egypt has opened its border with Gaza to allow ambulances to bring some of the wounded to Egyptian hospitals.

'All they need to do is stop firing'

Amir Gissin, consul general for Israel in Toronto, said the conflict could end now if Hamas agrees to end hostilities.

"All they need to do is stop firing," he told Â鶹´«Ã½net Saturday, adding that more than a thousand salvos have been fired at civilian targets in Israel over the last year.

The European Union said in a statement Saturday that the IDF operation has enacted an "unacceptable toll on Palestinian civilians," but Gissin said Israel is doing its best to avoid killing innocent people.

"We are sorry for every civilian which is being hurt, this isn't our aim," he said.

Meanwhile, protests against the air campaign have erupted across the Arab world. Several hundred people in Jordan protested outside a United National building in the capital, Amman.

"Hamas, go ahead. You are the cannon, we are the bullets," the demonstrators shouted. Some waved green Hamas banners.

In Beirut, young people flooded the streets and set tires on fire, while protests broke out in the al-Yarmouk camp outside of Damascus.

A Hamas spokesperson vowed that the organization would take revenge on Israel for the attacks with its own rocket strikes, as well as by sending suicide bombers into Israel.

"Hamas will continue the resistance until the last drop of blood," Fawzi Barhoum said on a Gaza radio station.

After a Hamas rocket killed a woman in the border community of Netivot on Saturday, Israel declared a state of emergency in communities within a 19-kilometre range of Gaza.

In 2005, Israel left Gaza after occupying the region for 38 years. But the move did not stem attacks from either side.

In early March of this year, the Israelis and the Palestinians agreed to a truce that began to fall apart in early November.

In the last week, about 200 mortars and rockets have hit Israel, which responded with threats of military reprisals before today's air campaign.

With files from Â鶹´«Ã½ correspondent Janis Mackey Frayer and The Associated Press