The assault follows a brief humanitarian truce and despite an appeal from Washington, which cautioned against a land assault, for Israel to do more to protect civilian lives.
Hamas warned Israel would pay a "high price" for its escalation.
"Following 10 days of Hamas attacks by land, air and sea, and after repeated rejections of offers to de-escalate the situation, the Israel Defence Forces (army) has initiated a ground operation within the Gaza Strip," it said in a statement.
The army said the aim of the operation is to protect Israeli lives and crush Hamas, which controls the Gaza Strip.
The objective was "to establish a reality in which Israeli residents can live in safety and security without continued indiscriminate terror, while striking a significant blow to Hamas's terror infrastructure."
Israel launched Operation Protective Edge on July 8 to stamp out rocket attacks from Gaza, but confined it to air attacks until late Thursday.
Shortly before the announcement of the ground operation, Egypt sharply criticised Hamas, saying the group could have saved dozens of lives had it accepted a Cairo-mediated truce.
Hamas had rejected the ceasefire intended to start on Tuesday and continued firing rockets at Israeli cities.
"Had Hamas accepted the Egyptian proposal, it could have saved the lives of at least 40 Palestinians," Egypt's Foreign Minister Sameh Shoukri said.
Our infantry, tanks, artillery, engineers & field intelligence are entering Gaza supported by the Air Force, Navy & other security agencies.
— Israel Defense Forces (@IDF) July 17, 2014
BREAKING NEWS: A large IDF force has just launched a ground operation in the Gaza Strip. A new phase of Operation Protective Edge has begun.
— Israel Defense Forces (@IDF) July 17, 2014
More children killed
At least five more Palestinian children were among the dead in Israeli strikes Thursday, as a rehabilitation hospital in Gaza City was targeted by tank fire, after having already been hit earlier this week.
Earlier, a rocket fired from Gaza hit southern Israel exactly as a UN-requested five-hour truce ended at 3:00 pm (1200 GMT), and the Israeli military resumed its air strikes.
Two Palestinian brothers aged seven and eight who were playing on a Gaza rooftop with their 10-year-old cousin were among five children killed shortly after the truce expired, medics said.
Israeli tanks also shelled Al-Wafa hospital injuring several nurses, said director Basman Alashi who voiced concern for the 14 patients trapped in the rehabilitation centre who are paralysed or in coma.
"There is no place safe in Gaza! If a hospital is not safe, where is?" said Alashi, whose hospital has been hit at least three times since the conflict erupted.
The army says more than 1,000 rockets fired from Gaza have struck Israel since last week and 283 have been shot down by the Iron Dome air defence system.
On Thursday the air force shot down a Hamas drone near the southern city of Ashkelon close to the Gaza border, the second this week, the military said.
Meanwhile, the UN's Palestinian refugee agency said it had launched a probe after finding 20 rockets hidden in one of its vacant schools in Gaza, calling it was a "flagrant violation" of international law.
With regional efforts to broker a lasting ceasefire gathering pace in Cairo, an Israeli official said earlier that the Jewish state had agreed a truce with Hamas to begin at 0300 GMT Friday.
However Hamas denied the claim, with spokesman Sami Abu Zuhri telling AFP: "The news about a ceasefire is incorrect. There are continuing efforts but no agreement until now."
Civilian casualties
In Washington, State Department spokesperson Jen Psaki called on Israel to protect civilians, after dramatic footage of children killed on a Gaza beach in an Israel strike Wednesday.
"We ask (Israel) to redouble their efforts moving forward to prevent civilian casualties, given the events of the last couple of days," Psaki said.
"We believe that certainly there is more that can be done."
On the diplomatic front, Palestinian leader Mahmud Abbas met Egyptian President Abdel Fattah al-Sisi in Cairo to discuss ways of ending the Israeli offensive on Gaza.
Hamas, the main power in Gaza, is demanding that Israel lifts its eight-year blockade of the coastal enclave, the opening of the Rafah border crossing with Egypt and the release of Palestinian prisoners.
Thursday's short-lived truce allowed medical aid to be transported into Gaza and gave residents of the battered enclave a chance to leave their homes to stock up on goods.
In Gaza City, the streets immediately filled with honking cars and traffic jams, and outside banks, hundreds of people massed by ATMs to withdraw money to buy supplies.
Just moments before the humanitarian truce began at 0700 GMT, Israeli tank fire killed three people in southern Gaza, Palestinian medics said.
The Gaza-based Palestinian Centre for Human Rights (PCHR) says more than 80 percent of those killed in Israeli air strikes have been civilians.
Turkish Prime Minister Recep Tayyip Erdogan accused the Jewish state of seeking a "systematic genocide" of the Palestinians.
COMMENTS (14)
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I'm with Israel.
Why isn't Malala condemning these attacks?
@Bibi Tomorrow? we are facing this since independence courtesy of your Non state actors aka "Strategic Assets" @Lagoori Simply you could not, you will not even if you don't have capability neither courage, Read 6 days war
@ Usman Lakhani. Re: If this is not genocide, what is? +++++++++++++++++++++++++++++++++++++++++++++
Genocide is what the Pakistan’s Punjabi controlled military did to the Bengali’s of Erstwhile East Pakistan and present day Bangladesh in 1971. Events in Gaza that seem to have agitated you are a mere bagatelle in comparison to the Bangladesh Genocide presided over by Punjabi controlled Pakistan Military. Indeed events in Gaza that seem to have agitated you are also a mere bagatelle in comparison to the events now taking place in North Waziristan, yet again unleashed by Punjabi controlled military, against Pathan’s under Operation Zarb-e-Azb.
If concerned about Genocide, forget Gaza, focus on Pakistan.
This so-called war would end the day the kill ration becomes 10:1 from 100 to 1. As long as there is total hegemony of Israel in the air, sea and land the large jail of Gaza would remain that way. Israeli govt claims that Palestinians are not coming to negotiating table and not interested in peace. This is like claiming that black in the US or South Africa were not interested in getting equal status. Israel has all the cards and nobody stops them from giving Palestinians "some" rights to start with.
@Lagoori: It wont help. Pakistan is not a global power and doesn't have aircraft carriers. Pakistan militarily and economically a weaker nation vis-a-vis israel.
@Blunt: Muslims and Muslim states opposes human rights.
Human Rights Watch – "Palestinian rocket attacks on Israel appear to be indiscriminate or targeted at civilian population centers, which are war crimes, while Israeli attacks targeting homes may amount to prohibited collective punishment."
I think you are confused between human rights and human values.
@Usman Lakhani: defense
@Lagoori : Dont u think we already have a lot to protect in our country. I think the only way Pakistan can help its muslim brothers is by taking on board other Muslim countries specially the incompetent Arab League to mobilize international community and pressurize US and UN for seeking a durable peace in Gaza / Palestine.
I say come for talks . There must be SOME way out . At this rate Gaza will be left with only a huge pile of dead and maimed bodies .
Where are the 'so called' champions of human rights? or they least interested in cases where Muslims are victims?
Why don't we send our troops to help our Palestinian brothers?
Weakness is terrorism in new world order. Israel did cease fire for the sake of humanity and prepare itself to slaughter humanity. What s shame.
If this is not genocide, what is?
If Hamas cannot kill a single Israeli, why are they trying their best to kill their fellow Palestinians at the hands of Israeli Military? This is a unique way of fighting a war.
... and the butchery continues while the world snores. It happens with Palestinians today, tomorrow it's your turn.