"What has been conducted in Gaza so far is not a large-scale ground offensive," Ehud Barak said speaking on the Galei Tsahal army radio station.
Barak said stronger action would aim to weaken Hamas - which has refused to recognize Israel and has almost daily fired rockets on the Jewish state from the enclave - "or even overthrow it."
On Saturday, Israeli army killed 61 people in Gaza, half of them civilians. Palestinian media called the bloodshed the worst since an "intifada" against Israeli occupation in 2000.
UN Secretary General Ban Ki-moon condemned an excessive use of force by Israel and demanded its end to air and ground operations.
"We are not very enthusiastic about the prospect, but will face it if need be," the minister said.
Two Israeli soldiers were killed and seven wounded in fighting with Gaza militants on Saturday. Six residents of the southern Israeli city of Ashkelon were also injured in attacks by Palestinian radicals, who began firing longer-range Katyusha rockets, Israeli officials said.
Ban Ki-moon expressed concerns that the new outbreak of violence would hamper the peace process that was revived at a U.S.-hosted Middle East conference in November. Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas pledged to forge a peace deal by the end of 2008.
Reuters said citing Israeli officials that Abbas's chief peace negotiator Ahmed Qurie called off a meeting scheduled for Monday with his Israeli counterpart, Foreign Minister Tzipi Livni. But Abbas, who declared Sunday a day of mourning, had taken no decision to pull out from the peace process.
