GAZA CITY - Israel warned Friday it could broaden a Gaza ground assault aimed at smashing Hamas’s network of cross-border tunnels, as it stepped up attacks that have killed more than 260 Palestinians.In the face of Israel’s land, sea and air offensive that has sent terrified civilians running for cover, the Hamas which runs Gaza remained defiant and warned the Jewish state it would pay dearly for putting boots on the ground. Israeli Prime Minister Benjamin “Netanyahu is killing our children and he is going to pay a heavy price. We are not afraid,” Hamas spokesman Sami Abu Zuhri said.He warned that Israel with the launch of its first ground incursion into the coastal territory in more than five years would “drown in the swamp of Gaza”. As Gaza Strip residents spoke of a night of terror, with fierce gunbattles in the south and all-night shelling in the north, Netanyahu warned the operation could yet be widened, despite growing international calls to avoid harm to civilians. “My instructions and those of the defence minister to the military ... is to prepare for the possibility of a significant broadening of the ground activity,” he told ministers at a special cabinet session in Tel Aviv.Immediately afterwards, he convened his security cabinet to discuss plans for a possible expansion of the campaign, which began on July 8 with the aim of stamping out cross-border rocket fire. Early on Friday, Israel approved the call-up of another 18,000 reservists, taking the total number approved to 65,000, the army said.On Thursday night, the army said it struck 150 targets across Gaza, among them four tunnels and 21 rocket launchers, with troops killing 17 “terrorists” and arresting another 13. US Secretary of State John Kerry urged Israel to limit collateral damage in Gaza and be “precise” in its ground assault on the enclave, the State Department said. Pope Francis on Friday phoned Israeli President Shimon Peres and Palestinian president Mahmud Abbas to call for an immediate ceasefire in the Gaza conflict, the Vatican said.The ground operation, which began in the Gaza periphery at around 2000 GMT, sent thousands of people fleeing west to escape the fighting along the Gaza border, a UN official told AFP. “People are fleeing from east to west, away from the border. We’re hearing about thousands. We now have 27 schools open for them and we’re expecting to open more,” he said. “We have close to 30,000 people taking refuge (with us) at this point.”By mid-morning, the road between Gaza City and Khan Yunis was deserted with only a single minibus, packed with passengers, careering south, its windows covered with makeshift white flags, an AFP correspondent said.“They were shelling from dusk until the early hours of the morning. We’ve left the eastern front and we’re going to a UN school,” Shejaiya resident Bassil Araeer told AFP.“There’s no water at home, no electricity at home, just shelling and fear and terror,” he said. Since midnight, 24 Palestinians have been killed by Israeli fire across Gaza, including three teenagers and a five-month-old baby, raising to 265 the number of Gazans killed since Israel launched its attacks on July 8.An Israeli soldier was also among the dead, the army said. Army spokesman Major Arye Shalicar told AFP that Israel’s goal was “to strike Hamas infrastructure and operatives” in Gaza, including tunnels which are used for cross-border attacks on southern Israel. They are also used by militants as an assembly area for rockets. Experts say a ground operation is the only way to cause significant damage to the underground network.“Last night our forces began a ground operation to hit the terror tunnels crossing from Gaza into Israel’s territory,” Netanyahu told ministers. He cited the example of a tunnel through which 13 heavily-armed militants had managed to infiltrate southern Israel on Thursday before they were spotted by troops, with one killed in an air strike and the rest fleeing back underground. “It is not possible to deal with tunnels only from the air, so our soldiers are also doing that on the ground,” he said, while admitting there was “no guarantee of 100 percent success.” “There is no guarantee that a ground incursion into Gaza will lead to victory,” Israel’s top-selling daily Yediot Aharonot said of the narrow, densely-populated enclave that is home to 1.8 million Palestinians.“Ground operations are necessary not only to deal with the tunnel problem, but also to project to the other side that Israel is undeterred from a head-on clash,” it said.“As of yesterday, Operation Protective Edge was showing signs of a draw, which is basically an Israeli defeat. The ground operation is intended to change the situation.”Israel pulled out all of its troops and settlers from Gaza in 2005, but within a year it became the de facto seat of Hamas after it won a landslide victory in Palestinian parliamentary elections.In summer 2007, the movement forcibly took over the territory, ousting factions loyal to the West Bank-based Palestinian Authority. The Israeli land assault came just hours after a brief humanitarian truce on Thursday and despite urgent diplomatic appeals that Israel redouble efforts to protect civilians.