Sixteen civilians were killed, and dozens were wounded, authorities said. In all, 63 people have died since clashes between Israel and extremists affiliated with Gaza's ruling Hamas movement spiked Wednesday. At least 33 were civilians.
An Israeli man was also killed by Palestinian rocket fire that grew more ominous when it struck closer to Israel's heartland. The rocket fire has renewed threats of an Israeli invasion of Gaza.
Hamas said the baby, Malak Karfaneh, died just before midnight Friday in an Israeli strike on Beit Hanoun, a northern town where militants often launch rockets at Israel. But local residents said one of those rockets fell short and landed in the area of the child's house.
The Israeli military, which sent troops, tanks and aircraft to target Gaza rocket squads, said it only attacks rocket-launching operations, but said militants sometimes operate within civilian areas. On Saturday, it said troops identified 15 hits in its operations against rocket squads and militants laying explosive devices against Israeli targets.
Pitched battles erupted Saturday near the northern town of Jebaliya, pitting Israeli troops backed by tanks and attack aircraft against Palestinian militants launching crude rockets and mortars.
Among those killed were at least 11 militants, but also at least 16 civilians, including a 17-year-old girl and her 16-year-old brother, a 45-year-old man and his 20-year-old son and two sisters thought to be in their early 20s.
The sisters and another civilian were killed by tank shells that struck two houses in separate attacks, Palestinian officials said. Rescue teams evacuated a 7-month-old boy from one of the houses, unharmed.
The Israeli military said it would look into reports of tank shells hitting houses.
Associated Press Television News footage of one of the damaged houses showed paramedics rushing an unmoving woman, lying on a stretcher, her face covered with a cloth, out of a room clouded with dust.
Another woman wails: "There are children in the house." A child screams, "I want my father." On a nearby street, four men rush to pick up a wounded man lying on the ground.
Tareq Dardouna, a resident of the Jebaliya area, told the AP that a relative was killed outside his home in the crossfire that began raging at 3 a.m.
"His body is still on the ground," Dardouna said in a phone interview from his home, where he was tending to four wounded people amid the cries and screams of children. "Ambulances tried to come, but they came under fire. ... We are in a real war."
A group of journalists came under fire in Jabaliya and a cameraman for Dubai TV, Mahmoud Ajrami, was wounded. Crews from the al-Jazeera Arabic-language news channel and a local news agency came under fire near an ambulance center, unable to leave.
Also in response to the fighting, the United Nations closed down 37 schools it runs in the northern Gaza Strip, affecting some 40,000 students said Christopher Gunness, a U.N. official.