* Conflict erupted on Monday, still no sign of end
* U.S. and Arab diplomats pushing to restore calm
* President Biden sends envoy for talks (Adds building housing AP and Al Jazeera offices destroyed)
By Nidal al-Mughrabi and Rami Ayyub
GAZA/JERUSALEM, May 15 (Reuters) - Israel pummelled Gaza with air strikes and Palestinian militants launched rockets at Tel Aviv and other cities on Saturday, with no sign yet of an end to their worst escalation since 2014.
A 12-storey Gaza tower block housing the offices of the U.S.-based Associated Press and Qatar-based broadcaster Al Jazeera as well as other offices and apartments collapsed on Saturday after being struck by Israeli missiles.
The owner of the building had been warned in advance of an impending Israeli missile strike, a Reuters reporter said, and the building had been evacuated. No injuries were reported.
An AP journalist, who asked not to be named, confirmed that the building had been destroyed and said all their staff were safe but in shock.
The Israeli military did not immediately provide comment on the strike on the building.
Hamas militants fired barrages of rockets overnight and during the day at Israel. Israeli planes hit what the military said were sites used by Hamas, the Islamist group running Gaza.
U.S. and Arab diplomats are seeking to halt almost a week of conflict but efforts have yet to gain traction.
Palestinians medics say at least 139 people, including 39 children, have been killed in Gaza since the conflict erupted on Monday.
Israel has reported nine dead, including two children.
The Israeli bombardment killed more than 15 Palestinians in Gaza overnight and on Saturday, medics said, including a woman and four of her children who died when their house in a refugee camp was hit, while five other were also killed.
Israel's military said of the incident that it hit an apartment in the Beach refugee camp used by Hamas.
In Israel, thousands of Israelis ran for shelter. Sirens wailed repeatedly across Tel Aviv on Saturday. One rocket struck a residential building in the commercial hub's suburb of Ramat Gan, killing a 50-year-old man, medics said.
In Gaza, Akram Farouq, 36, dashed out of his home with his family after a neighbour told him they had received a call from an Israeli officer warning that their building would be hit.
"We haven't slept all night because of the explosions, and now I am out in the street with my wife and children, who are weeping and trembling," he said.
Israel's military said its aircraft struck rocket launch sites and apartments belonging to Hamas militants.
In Israel's coastal city of Ashdod, Mark Reidman surveyed damage to his apartment building from a rocket hit.
"We want to live in peace and quiet," the 36-year-old said, adding he had to try to explain to his three young children "what happened, and why this is happening".
Hamas launched Monday's rocket assault after tensions over a court case to evict several Palestinian families in East Jerusalem and in retaliation for Israeli police clashes with Palestinians near the city's al-Aqsa Mosque, Islam's third holiest site.
SEEKING A CEASEFIRE
Regional and international diplomatic efforts have yet to show any signs of halting hostilities. Egypt, which has been leading regional efforts, sent ambulances across its border with Gaza to bring Palestinian casualties to Egyptian hospitals.
U.S. President Joe Biden's envoy Hady Amr, deputy assistant secretary for Israel and Palestinian affairs, arrived in Israel on Friday, before a meeting on Sunday of the U.N. Security Council. The U.S. Embassy said in a statement that the envoy aimed "to reinforce the need to work toward a sustainable calm".
Hostilities between Israel and Gaza have been accompanied by violence in Israel's mixed communities of Jews and Arabs. Synagogues have been attacked, Arab-owned shops vandalised and street fights have broken out. Israel's president, who has a largely ceremonial role, has warned of civil war.
The conflict adds further complexity to Israel's fractious politics. It dealt a blow to opposition attempts to unseat Prime Minister Benjamin Netanyahu, when a potential right-wing partner scrapped coalition talks after violence erupted. This may mean Israelis face a fifth election in just over two years.
Palestinian casualties also extend beyond Gaza. Palestinians, who each year on May 15 mark Nakba or "Catastrophe" Day - their displacement in the 1948-49 war that accompanied the creation of the modern state of Israel - have reported 11 people killed this week in the occupied West Bank after protesters and Israeli forces clashed.
Egypt was pushing for a ceasefire so talks could start, two Egyptian security sources said on Friday. Cairo has been leaning on Hamas and pressing others, such as the United States, to secure an agreement with Israel.
"The mediators from Egypt, Qatar and the United Nations are stepping up their contacts with all sides in a bid to restore calm, but a deal hasn't yet been reached," a Palestinian official said on Friday.
The United Arab Emirates called on Friday for a ceasefire and talks, offering condolences to all victims. In September, the UAE and Bahrain became the first Arab states in a quarter century to establish formal ties with Israel.
Living conditions for Gaza's 2 million people are worsening, with households receiving just four hours a day of power instead of the usual 12, after lines from Israel and Gaza's sole power station were damaged, officials said. Fuel was also running low.
Israel's military said on Saturday about 2,300 rockets had been fired from Gaza at Israel since Monday, with about 1,000 intercepted by missile defences and 380 falling into the Gaza Strip.
(Additional reporting by Dan Williams and Ari Rabinovitch in Israel, Ali Sawafta in Ramallah, Aidan Lewis in Cairo, Nandita Bose and Steve Holland in Washington, Michelle Nichols in New York and Emma Farge in Geneva Writing by Rami Ayyub and Edmund Blair Editing by Frances Kerry)
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