* Netanyahu does not rule out ground invasion into Gaza
* Militants warn will fire rockets at Israel's main airport
* 121 Palestinians, many civilians, killed by Israeli fire
* Gaza militants launch rocket salvoes deep into Israel (Updates death toll, Israel rolling out more Iron Dome batteries)
By Nidal al-Mughrabi and Ori Lewis
GAZA/JERUSALEM, July 12 (Reuters) - Israel rushed an eighth missile interceptor battery into service on Saturday to counter stronger-than-expected rocket fire from Gaza as the military pounded positions in the Palestinian enclave for a fifth day, killing 15 people, medics said.
The Jewish state kept options open for a possible ground offensive into densely populated Gaza despite international pressure to negotiate a ceasefire in the conflict, which has killed 121 in the Islamist-ruled enclave since Tuesday.
Residents said a mosque in the central Gaza Strip was bombed to rubble. The Israeli military said the mosque had housed a weapons cache. Referring to Israel's prime minister, graffiti scrawled on one of the mosque's blasted walls read, "We will prevail despite your arrogance, Netanyahu."
Eight other mosques have been damaged from bombing and 537 Gaza houses have either been destroyed or damaged, according to the Gaza-based Al-Mezan Association for Human Rights.
By Saturday, no Israeli had been killed by rockets salvoes out of Gaza, thanks in part to Iron Dome, a partly U.S.-funded interceptor system that operators said had exceeded expectations in shooting down missiles.
But racing for shelter from rockets has become a daily routine for hundreds of thousands of Israelis, and some 20,000 reservists have already been mobilised for a possible thrust into Gaza, the army said.
"We have upgraded the (Iron Dome) system recently from a number of aspects ... We try always to be one step ahead of the enemy ... and we see that its capabilities exceed our expectations," a Defence Ministry official said on Israel Radio.
"In the past week we have carried out a very complex technological exercise to deliver the eighth system ...We brought together all the components from the production line and within days we made it operational," he added, saying that a ninth battery could be made ready within days.
Israel said it was determined to end cross-border rocket attacks that intensified last month after its forces arrested hundreds of activists from the Islamist Hamas movement in the West Bank after the abduction there of three Jewish teenagers who were later found killed. A Palestinian youth was then killed in Jerusalem in a suspected revenge attack by Israelis.
"PREPARING FOR ALL POSSIBILITIES"
Asked if Israel might move from the mostly aerial attacks of the past four days into a ground war in Gaza to stifle the rocket salvoes, Prime Minister Benjamin Netanyahu said: "We are weighing all possibilities and preparing for all possibilities."
"No international pressure will prevent us from acting with all power," he told reporters in Tel Aviv on Friday, a day after a phone call with U.S. President Barack Obama about the worst flare-up in Israeli-Palestinian violence in almost two years.
Casualties on both sides would probably increase significantly if Israel's formidable mechanised forces stormed into the largely urbanised enclave that runs 40 km (25 miles) down the Mediterranean coast.
Gaza medical officials said at least 81 civilians, including 25 children, were among the 121 dead so far from aerial strikes on the sliver-like territory into which nearly 2 million people are packed, many in dilapidated, flimsy dwellings.
Three militants and 12 other people, including two disabled women at a rehabilitation centre and a 65-year-old man, were killed by air strikes early on Saturday, doctors there said.
One of the dead in an air strike that killed six people in a Gaza street was identified as the nephew of Ismail Haniyeh, the Hamas political leader in the territory.
An Israeli military spokeswoman said she was checking on why the rehabilitation centre in an eastern district of Gaza City was hit by an Israeli tank shell. Four others including two children were wounded and in serious condition, medics said.
Washington affirmed Israel's right to defend itself in a statement from the Pentagon on Friday. But Defence Secretary Chuck Hagel told Israeli Defence Minister Moshe Ya'alon he was concerned "about the risk of further escalation and emphasized the need for all sides to do everything they can to protect civilian lives and restore calm", a Pentagon statement said.
In Israel, a Palestinian rocket seriously wounded one person and injured another seven when it hit a fuel tanker at a service station in Ashdod, 30 km (20 miles) north of Gaza. Islamist militants in Gaza warned they would launch rockets at Tel Aviv's main international airport and warned airlines to stay clear.
Western-backed Palestinian President Mahmoud Abbas, based in the Palestinian self-rule area of the Israeli-occupied West Bank, urged the United Nations Security Council to order an immediate ceasefire.
But Netanyahu said Israel's campaign "will continue until we are certain that quiet returns to Israeli citizens". Israel had hit more than 1,000 targets in Gaza and there were "more to go."
Israel's army chief, Lieutenant-General Benny Gantz, said his forces were ready to act as needed - hinting at readiness to send tanks and ground troops across the barbed-wire boundary into Gaza, as Israel last did for two weeks in early 2009.
If Israel launches a ground invasion of Gaza, it would be the first since a three-week war with Hamas in the winter of 2008-09 when 1,400 Palestinians and 13 Israelis were killed.
The Israeli military issued a daily summary on Saturday, saying it had managed to strike at "10 terror operatives, six of whom were directly involved in the launch of rockets at Israel at the time of the targeting".
The statement added that 68 rocket launchers, 21 militant compounds and 18 weapons-manufacturing facilities had been hit and militants had fired almost 700 projectiles into Israel.
Rockets have reached deeper than ever before into the Jewish state, with some landing up to 100 km (60 miles) from Gaza.
CALL FOR CEASEFIRE
Abbas, who agreed a power-sharing deal with Gaza's dominant Hamas in April after years of feuding, called for international help. "The Palestinian leadership urges the Security Council to quickly issue a clear condemnation of this Israeli aggression and impose a commitment of a mutual ceasefire immediately."
After the failure of the latest U.S.-brokered peace talks with Israel, Abbas's deal with Hamas angered Israel.
Tel Aviv's Ben-Gurion Airport has been fully operational since the Israeli offensive began and international airlines have continued to fly in, with no reports of Gaza rockets - largely inaccurate projectiles - landing anywhere near the facility, inland from the Mediterranean coastal metropolis. The airport is within a zone covered by Iron Dome.
Fire was also exchanged across Israel's northern border on Friday. Lebanese security sources said two rockets were launched into northern Israel but they did not know who was responsible. Israel responded with bursts of artillery. Palestinian groups in Lebanon have often sent rockets into Israel in the past.
Israel's Gaza operation is the deadliest since November 2012, when around 180 Palestinians and six Israelis were killed during an Israeli air campaign to punish Hamas for missile attacks. That conflict was eventually halted with mediation from Egypt, then governed by Hamas's Muslim Brotherhood allies.
But Egypt, now ruled by the Brotherhood's enemies, is locked in a feud with Hamas over the group's alleged support for jihadi militants in Egypt's Sinai desert - something Hamas denies. Cairo said on Friday its "intensive efforts" with all sides to end the warfare has met only "intransigence and stubbornness".
On Saturday, Egypt opened the Rafah crossing with Gaza, which it had largely sealed since the July 2013 ouster of President Mohamed Mursi, to allow ambulances ferrying wounded Gazans for treatment into Egypt, as well as 500 tonnes of Egyptian food and medical supplies into the enclave. (Additional reporting by Allyn Fisher-Ilan and Dan Williams in Jerusalem and Ali Abdelatti in Cairo, Editing by Mark Heinrich)
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