The Israeli military said on Monday it was fighting a “war of attrition” in Gaza and that a ground invasion remains possible.
Over the past week, 200 people in Gaza have been killed by Israeli air strikes and eight people in Israel killed by rocket fire from the Palestinian enclave, according to medical officials.
Although there have been international calls for an end to the daily bombardment, neither side has talked publicly about a ceasefire.
“This is a war of attrition, the IDF [Israeli military] can go on with this forever and they [Hamas] can go on with their rockets, sadly, also for a very long time,” an Israeli military official told journalists.
"The price they are paying is rising higher and higher," the military official said, referring to the Hamas militant movement which controls Gaza.
“[We] are providing the political level with the conditions to talk about, with whoever will broker such a deal with Hamas, for a diplomatic end for this fighting,” he added.
Hundreds of Israeli strikes on Gaza have caused extensive damage to infrastructure, with roads leading to hospitals hit and sewage spilling out onto the streets in some areas, after pipes were destroyed.
The UN said Gaza residents are currently receiving only around six to eight hours of electricity daily.
More than 3,150 rockets have been fired from Gaza over the past week, according to Israel, some of which have hit buildings and roads.
Israel said it is targeting Hamas military targets, including an extensive network of tunnels that is used to transport fighters, weapons, fuel and food.
“We’re not trying to destroy hundreds of kilometres, we’re trying to create these choke points in order for the rest … being irrelevant,” the Israeli military official said.
In a Sunday strike which Israel said was targeting tunnels, 42 people – including 10 children – were killed when their homes collapsed.
"The foundations of these buildings was hit in a way that made these buildings collapse," the military official said.
“This is very unfortunate and we are very sorry for any loss of life that happened.”
There have been fears the conflict could further escalate into a ground war, last seen in 2014, when a 50-day conflict left a devastating toll.
In 2014, at least 2,104 Palestinians – including 1,462 civilians, according to the UN, and 66 Israeli military personnel and seven civilians were killed.
Israeli troops have massed on the border for days and used tanks to strike Palestinian territory, accompanying intense shelling.
"I would not rule anything [out], including a ground forces attack, at this point," said the military official.
Israeli Prime Minister Benjamin Netanyahu, who is clinging to power after failing to form a coalition government this month, has not openly called for a ceasefire.
"We are continuing to take action, even at this hour, as long as necessary to restore quiet and security to you, citizens of Israel. It will yet take time," he said on Sunday evening.
Mr Netanyahu said Israel had received "very serious backing" from the US, whose envoy Hady Amr arrived in Tel Aviv on Friday.
Washington has so far avoided using the term "ceasefire" in public statements, although diplomatic sources told The National that US officials are pushing for an end to the hostilities.