Last updated 9.44pm

The death toll from heavy fighting between Israeli and Hamas forces was climbing fast on Sunday, with Israel reporting 700 of its citizens having been killed when Hamas militants infiltrated its border with Gaza. Over 100 people were being held as "prisoners" by the militant group, the Israeli government said. Hamas reported over 400 Palestinians killed in Israeli retaliatory attacks.

The death toll in Israel included 260 shot at random at a music festival in southern Israel, where several young people were also captured and taken hostage.  

Hamas released images of several Israelis taken captive, and Israeli army spokesman, Daniel Hagari confirmed that soldiers and civilians had been kidnapped.

Fighting was still continuing in some locations in Israel on Sunday afternoon as Prime Minister Benjamin Netanyahu warned they were "embarking on a long and difficult war".

The conflict's bloodiest escalation in decades saw Hamas early on Saturday launch a massive rocket barrage as hundreds of its militants breached the fortified border and attack some 22 locations in southern Israel.  

Gaza officials said intense Israeli air strikes on the coastal enclave had brought the Palestinian death toll to at least 400, with nearly 1,700 wounded.

Fears of regional escalation

Fears were growing of a regional escalation. The Hizbollah terrorist group, in Lebanon, warned it would support Hamas if Israel launched a ground invasion of Gaza, and Iran, which supports both Hamas and Hizbollah, also promised its support.

The United States, meanwhile, said it would deliver more munitions to Israel and would provide whatever its long-time ally Israel needed. A naval task group including an aircraft carrier and a guided missile cruiser were being moved closer to Israel's shores amid reports that Americans were among the people taken hostage by Hamas. Three Americans were reported dead.

"We are embarking on a long and difficult war that was forced on us by a murderous Hamas attack," Netanyahu said on X, formerly Twitter, early Sunday.

"The first stage is ending at this time by the destruction of the vast majority of the enemy forces that infiltrated our territory.

"At the same time, we have begun the offensive phase, which will continue with neither limitations nor respite until the objectives are achieved. We will restore security to the citizens of Israel and we will win."

Earlier, the premier warned that "all the places in which Hamas is based, in this city of evil, all the places Hamas is hiding in, acting from -- we'll turn them into rubble".

The fighting -- which comes half a century after the outbreak of the 1973 Arab-Israeli war -- prompted Israel to cut off Gaza's electricity, fuel and goods supplies, Netanyahu said.

- 'So many bodies' -  

The Islamist group started the multi-pronged attack around 6:30 am on Saturday  with thousands of rockets aimed as far as Tel Aviv and Jerusalem, some bypassing the Iron Dome defence system and hitting buildings.

Hamas fighters -- travelling in ground vehicles, motorised paragliders and boats -- breached Gaza's security barrier and attacked nearby Israeli towns and military posts, opening fire on residents and passersby.

"Send help, please!" one Israeli woman sheltering with her two-year-old child pleaded as militants outside opened fire and tried to break into their safe room, Israeli media reported.

Bodies were strewn on the streets of the Israeli town of Sderot near Gaza and inside cars, the windscreens shattered by a hail of bullets.

"I saw many bodies, of terrorists and civilians," one man told AFP, standing beside covered corpses on a road near Gevim Kibbutz in southern Israel. 

"So many bodies, so many bodies."

AFP journalists witnessed Palestinian armed men gather around a burning Israeli tank, and others driving a seized Israeli military Humvee vehicle back into Gaza, where they were met by cheering crowds.

- 'Gates of hell' -

Israeli army Major General Ghasan Alyan warned Hamas had "opened the gates of hell".

An AFP journalist in Gaza saw clouds of dust from the remains of bombed residential towers which Gaza's interior ministry said contained 100 apartments. 

Israel's military said it had warned residents to evacuate before targeting the multi-storey buildings used by Hamas.

Israel's state-run electricity company cut the power supply to Gaza as army flares lit up the night sky.

The escalation follows months of rising violence, mostly in the occupied West Bank, and tensions around Gaza's border and at contested holy sites in Jerusalem.

Before Saturday, at least 247 Palestinians, 32 Israelis and two foreigners had been killed this year, including combatants and civilians, according to Israeli and Palestinian officials.

Hamas labelled its attack "Operation Al-Aqsa Flood" and called on "resistance fighters in the West Bank" as well as in "Arab and Islamic nations" to join the battle.

Its armed wing, the Ezzedine al-Qassam Brigades, claimed to have fired more than 5,000 rockets, while Hecht said Israel had counted more than 3,000 incoming rockets.

Hamas chief Ismail Haniyeh said the group was on the "verge of a great victory".

"The cycle of intifadas (uprisings) and revolutions in the battle to liberate our land and our prisoners languishing in occupation prisons must be completed," he said.

- 'Dangerous precipice' -

Air raid sirens wailed across southern and central Israel, as well as in Jerusalem. In Tel Aviv, a gaping hole was ripped into a building, with residents boarding a bus to flee to safety.

The conflict sparked major disruption at Tel Aviv airport, where many carriers cancelled flights. Schools will remain closed on Sunday, the start of the week in Israel.

Hamas took control of Gaza in 2007, leading to Israel's crippling blockade of the impoverished enclave of 2.3 million people.

Israel and Hamas have since fought several wars. The last major military exchange, in May, killed 34 Palestinians and one Israeli.

In northern Gaza on Saturday, hundreds of people fled their homes, carrying food and blankets, an AFP correspondent said.

Violence also erupted across the West Bank, including annexed east Jerusalem, with five Palestinians killed and 120 wounded in clashes with Israeli forces and settlers, Palestinian medical services said.

Western capitals condemned the wave of attacks by Hamas, which Israel, the United States and European Union consider a terrorist group.

European Commission President Ursula von der Leyen called the attack "terrorism in its most despicable form".

But Hamas drew support from other foes of Israel, with Iran's supreme leader declaring he was "proud" and Lebanese militant group Hezbollah praising the "heroic operation".

UN Middle East peace envoy Tor Wennesland warned of "a dangerous precipice" and called on all sides to "pull back from the brink".