According to the source, the escalation includes stationing 1,500 reservists, including infantry assault units, on the border.
"We are ready for an escalation. We're taking steps now... ahead of the possibility that the escalation increases. We're preparing for a gradual increase in the use of force, and increasing our rate of attacks (on Gaza targets)," he said.
The buildup comes after Israeli fighter jets pounded Gaza in bombing missions early Monday. Troops will leave the West Bank for deployment at the Gaza border.
Hamas, the pro-Palestinian political and military group in Gaza, which Israel regards as a terrorist organization, has participated in firing missiles and mortar shells into southern Israel, and is failing to prevent other groups from doing so.
Of the seven Hamas members who died while planting explosives in a south Gaza underground tunnel leading to an unidentified defense force target, the source said, "This was designed to enable a significant terror attack. In recent days, we have operated in this area, and we will continue to act against the threat of tunnels in the coming days." He stressed that the Israeli army found the tunnel and the casualties, and their deaths were not part of an airstrike.