Thrity-one bodies were brought to hospitals on Sunday morning, medics told Al Jazeera, and the number was expected to rise as ambulances were able to reach neigbhorhoods east of Gaza City.
Hundreds of people who had been trapped by overnight bombardment were entering Gaza City on foot in the morning as shelling could still be heard.
Israel announced on Saturday that four of its soldiers were killed in combat with Palestinian fighters, bringing the total death toll on the Israeli side to seven.
Al Jazeera, reporting from Jerusalem, said two soldiers were killed during an exchange of gunfire as they fought Palestinians in tunnels near the Israel-Gaza border.
A Palestinian fighter was also killed while several others escaped back into a tunnel into Gaza.
Earlier on Saturday, an Israeli Bedouin was killed when a rocket hit his encampment in southern Israel in an attack which also wounded four of his family, among them two young children, police said.
While shelling focused on northern Gaza on Saturday, heavy Israeli artillery attacks also took place across other areas of the Hamas-ruled territory. Drones, jets and attack helicopters patrolled the skies.