Israel says that 13 of its soldiers have died since Saturday night in its ground offensive in the Gaza Strip.
It brings the number of Israeli soldiers killed in the offensive to 18.
Gaza suffered the highest death toll since the offensive began, with at least 87 people reported killed on Sunday - 67 of them in one area.
Palestinian President Mahmoud Abbas said the deaths in the Shejaiya district east of Gaza City were a "massacre".
Israeli Prime Minister Benjamin Netanyahu vowed to continue operations in Gaza "as much as we need to" despite the casualties.
He said the Israeli government felt "deep pain" over deaths of its soldiers, and that Hamas, not Israel was responsible for the escalation in Gaza.
Sunday's death toll for the Israel Defense Forces (IDF) is higher than that sustained by the IDF during the entire three-week duration of Operation Cast Lead in 2008-2009, the last time that Israel sent ground troops into Gaza.
The soldiers killed on Sunday were all from the Golani Brigade, the Israel Defense Forces said.
The deaths of so many soldiers on a single day will shock Israeli society, the BBC's Chris Morris reports from southern Israel.
The BBC's Yolande Knell, in Gaza City, says there have been scenes of panic in the Shejaiya area, with thousands of residents fleeing.
The UN says 83,695 people have now been displaced in Gaza and have taken refuge in 61 shelters and that the figure is "rising all the time".
Witnesses spoke of bodies lying in the street.
A humanitarian truce was agreed in the area, but lasted less than an hour with both sides blaming each other for violating the truce.
Paramedics said that rescue workers have so far not been able to get to the eastern part of Shejaiya, an area very close to the Israeli border and about three kilometres (1.2 miles) away from Gaza City, which has seen heavy shelling.
In an interview with BBC Arabic, Israeli Prime Minister Benjamin Netanyahu called Shejaiya a "terror stronghold" and a centre for rockets that are fired out to Israel.
Mr Netanyahu said Israeli troops had no choice but to enter densely populated areas and that they had asked civilians to leave.
The death toll in Gaza rose sharply over the weekend, with the number of Palestinians killed now standing at more than 425 since the operation began, according to Palestinian health officials.
They say the number of wounded from the operation now stands at more than 3,000.
The majority of those killed are civilians, the UN says.
Credit: The BBC