A personal intervention by United Nations Secretary General Ban Ki-moon is required to help prevent the Gaza Strip crisis developing into full-scale conflict, Labour said.
Shadow foreign secretary Douglas Alexander said a "full-scale diplomatic initiative" by Mr Ban in the region within the coming days might be the only way to halt the violence.
Israel launched almost 200 airstrikes destroying targets including the prime minister's headquarters early Saturday morning in response to militant rocket attacks which hit Jerusalem for the first time.
Officials in the Hamas-ruled territory said 10 people died and children's charity Unicef appealed for the "utmost restraint" from both sides to prevent youngsters being killed and injured.
Six Palestinian children aged between 10 months and 15 years had been reported killed and 60 injured in airstrikes on Gaza, it said, with another fatally wounded by a rocket that fell short. And Israeli schools within a 25-mile radius were closed because of the "indiscriminate" rocket attacks.
Israel has called up thousands of reservists and stationed troops and tanks along the border in a clear signal that a ground invasion could be launched imminently.
Prime Minister Benjamin Netanyahu has warned that his country is prepared to extend its operation against Hamas, sparking fears of a repeat of the ground incursion four years ago in which hundreds died.
At least 30 Palestinians and three Israelis have died in the heightened hostilities since Israel's assassination of Ahmed Jabari, the Hamas military chief, in a drone strike on his car on Wednesday.
Egypt's president Mohammed Morsi is due to convene talks later involving Qatar, Turkey and the Hamas leader Khaled Meshaal in Cairo in an effort to restore a fragile ceasefire. But Mr Alexander said it was time for the United Nations to get directly involved.
"What is needed now is an immediate end to the violence. We urge the UN Secretary General to visit the region this week to begin talks with all parties, and with partners in the region," he said. "There must now be a full-scale diplomatic initiative, led by the UN Secretary General himself, to try and bring this conflict to an end. The only hope for peace and security for the citizens of the region will be through restarting the stalled negotiations towards agreeing a two-state solution."