The unfamiliar sound of air raid sirens wailed across Jerusalem last night as, for the first time, militants in Gaza targeted the city that Israelis and Palestinians both claim as their capital.

Israeli jets continued to pound targets across Gaza as its cabinet authorized the mobilisation of up to 75,000 reserve troops for a possible ground campaign – more than doubling the number of potential call-ups approved after the offensive began, and raising the spectre of a possible ground invasion.

Crowds of reservists who had received a "Tzav 8" emergency call-up were seen leaving their cars in makeshift car parks near Gaza and making their way to join their units. In another move that fuelled speculation of a military build up, the Israeli army had earlier closed civilian traffic on three roads that lead to, or border the Gaza Strip.

Earlier in the day, one rocket exploded in Gush Etzion, a West Bank settlement less than 10 miles away from the city centre, according to the local police. Hamas said it had targeted Israel's parliament, the Knesset, and timed the attack to coincide with the start of the Jewish Sabbath on the third day of the latest escalation in violence between the group that controls the Gaza Strip and Israeli forces.

Earlier reports suggested that as many as three rockets had been fired in the direction of Jerusalem, but had missed. Sirens were also heard in the West Bank city of Hebron. The attacks targeting Jerusalem followed more rocket attacks by Gaza militants on southern Israel.

The rockets fired at Jerusalem and other Israeli cities, including the commercial capital, Tel Aviv, followed a ratcheting up of strikes on Gaza by the Israeli military. More than 600 targets in the Palestinian enclave had been hit by last night, up from 225 on Thursday evening.

Meanwhile, sirens sounded repeatedly across southern Israel as more than 70 rockets were aimed at Ashdod, Ashkelon and Beersheba on Friday morning after an overnight lull that ended just before seven o'clock in the morning.

Benjamin Netanyahu, the Israeli Prime Minister, convened his advisers in the heavily fortified Kirya government compound in Tel Aviv to discuss the escalating crisis. "We did not choose to escalate the situation in the south, it was a decision of the Hamas, Islamic Jihad and the terror groups," Mr Netanyahu said.

"We are ready to expand the operation as necessary in a significant manner." The Mayor of Tel Aviv, Ron Huldai, ordered all public bomb shelters opened for the first time since the 1991 Gulf War.

The Israeli Defence Ministry said it would deploy a fifth battery of the Iron Dome missile defence system that has successfully intercepted about 150 rockets since Wednesday. Three soldiers were injured when a mortar bomb hit their vehicle near the border.