Israel pounds Gaza in 'all-out war' | Watch: 307 killed

SCARY MUSHROOM: Smoke rises after an Israeli air strike in the northern Gaza Strip.

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Gaza City: Israel bombed a Hamas government compound early Tuesday, leveling at least three structures, including the foreign ministry building, eyewitnesses and Hamas security sources told CNN.

A Gaza-based journalist, whose name was withheld for security reasons, told CNN he heard 18 blasts and that two fires were burning in the early morning.

Israel continues to strike Hamas targets in Gaza, an Israel Defense Forces spokesman told CNN.

Mortar fire along the Gaza border killed one Israeli soldier and wounded four others, he said.

The strike came the night after Israel's defense minister said the nation was in an "all-out war" with Hamas. For the third day, Israeli hit targets in Gaza, pushing the Palestinian death toll over 300.

"We have stretched our hand in peace many times to the Palestinian people. We have nothing against the people of Gaza," Defense Minister Ehud Barak said. "But this is an all-out war against Hamas and its branches."

Barak's remarks to parliament came as Israeli warplanes carried out a third day of strikes against Hamas, the Palestinian militant group that rules Gaza.

Most of the dead are Hamas militants, Palestinian medical sources said Monday. The attacks also have wounded about 650 people, the sources said.

Columns of smoke rose over Gaza City, while Israeli tanks cruised along the edges of Gaza.

Iyad Nasr, a spokesman for the International Committee of the Red Cross, said the streets of Gaza were largely empty while airstrikes continued Monday morning.

A UN spokeswoman in Gaza City described the scene as chaotic and said Palestinians were "running in all directions" and fighting among themselves.

Israel said the goal of the bombardment is to stop the stream of rockets fired from Gaza into southern Israel.

More than 40 rockets and mortar shells were fired into Israel on Monday despite the raids, according to Israeli police spokesman Mickey Rosenfeld. More than 150 rockets have been launched into Israeli territory since the campaign began, Israel Defense Forces said.

The White House on Monday called on Hamas to halt rocket fire against Israel, so calm can be restored in Gaza.

Israel has struck more than 300 Hamas targets since Saturday, its military said. The Israeli air force carried out at least 20 airstrikes on Gaza on Monday, Israeli military sources said.

Hamas security sources said the targets included the homes of two commanders of Hamas' military wing, the Izzedine al-Qassam Brigades, in the Jabalya refugee camp just north of Gaza City. Neither commander was among the seven people killed in those strikes, the sources said.

The Israeli military had no immediate comment on a report by Dr. Mu'awiya Hassanein that a strike near a mosque in Jabalya killed five children in a nearby home.

The situation triggered protests in Iran, Greece, Britain and Lebanon, and the Iranian government declared a day of mourning for Palestinians in Gaza.

Iran's Supreme Leader Ayatollah Seyed Ali Khamenei urged the world's Muslim populations to unite against Israel's attacks on Hamas in Gaza.

"All true believers in the world of Islam and Palestinian fighters are duty-bound to defend the defenseless women and children in Gaza Strip and those giving their lives in carrying out such a divine duty are 'martyrs,' " Khamenei said through Iran's official news agency IRNA.

US and Israeli officials told CNN that Hamas militants in Gaza have received support from Iran in the past in the form of weapons, training and cash.

"We know of Hamas operatives, commandos and soldiers who were trained in Iran itself. We know that. So there is a close cooperation and exchange of know-how and activities," said Isaac Herzog, a member of the Israeli Security Cabinet.

Iran denies any involvement with Hamas. But an Iranian official told CNN Iran has ties to Shiite groups such as Hezbollah, a political party in Lebanon with alleged terrorist roots.

UN Secretary-General Ban Ki-moon condemned Hamas for the rocket attacks, but also had strong words for Israel.

"While recognizing Israel's right to defend itself, I have also condemned the excessive use of force by Israel in Gaza. The suffering caused to civilian populations as a result of the large-scale violence and destruction that have taken place over the past few days has saddened me profoundly," he said in a prepared statement.

The UN Security Council called for both sides to immediately end the violence, but Israeli Prime Minister Ehud Olmert said Sunday that the campaign could last "for some time," and his Cabinet voted to call up 7,000 reservists.

So far, about 2,000 reservists have been activated, according to the government.

Hamas pledges it will defend its land and people from what it calls continued Israeli aggression. Each side blames the other for violating an Egyptian-brokered cease-fire. The truce formally expired December 19, but it had been weakening for months.

There was no indication of a ground operation inside the territory, but Foreign Minister Tzipi Livni said Sunday that Israel has not ruled out a push into Gaza. Livni defended the airstrikes, saying the raids have been aimed at "only military targets and places in which we know Hamas members are."