Ceasefire dead, Israel prepares to hit Gaza hard

GAZA CITY -- Israel was preparing Wednesday for a major air assault on parts of northern Gaza.

Both rocket attacks from militants in the Gaza Strip targeting Israel, and Israeli airstrikes on the tiny Palestinian territory intensified after a truce proposal crafted by Egypt was rejected by the militant group Hamas.

Tens of thousands of people have been told to clear out of parts of the Gaza Strip for their own safety.

CBS News' Holly Williams says it was a long night of heavy Israeli airstrikes in Gaza City after word that the ceasefire had failed.

In southern Gaza, two men were killed by a direct hit on their car, apparently deliberately targeted by the Israeli military for suspected links to a militant group.

But more than 200 Palestinians have lost their lives in Israeli airstrikes, and officials in Gaza say most of them were civilians.

Wednesday morning families fled the Zeitoun neighborhood after the Israeli military warned it planned to bombard the area.

"We've all gone mad," said a man in Arabic. "For God's sake end this conflict. I don't know who's worse -- the Jews or the Arabs."

Yesterday Israel suffered its first death during this escalation when a man was hit by a rocket while delivering food to Israeli soldiers near the Gaza border.

Palestinian militants have fired more than 1,000 rockets into southern Israel, but many of them have been shot down by the country's Iron Dome anti-missile defense system.

In Gaza there are no defenses.

Israel says it's destroying rockets launchers and command centers used by the militants, but in reality many of the targets are homes.

The United Nations says more than 500 houses have been razed by Israel's airstrikes.

CBS News asked Fawzy Barhom, a spokesman for the militant group Hamas which controls the Gaza Strip, why -- with more people being killed every day -- the group didn't agree to the ceasefire plan.

"They must stop the war first," he replied. "Because this occupation began the war first, and they are targeting the civilians."

As usual in this decades-old conflict, both sides blame each other.

On Tuesday, Israeli Prime Minister Benjamin Netanyahu said his country had no choice but to expand its offensive in Gaza.