The Israeli military on Monday said it struck hundreds of Hamas and Islamic Jihad targets in the Gaza Strip overnight and had sent four combat divisions south where it continued to battle Islamist militants two days after a bloody incursion.
A military spokesperson said fighting was ongoing at seven or eight locations near Gaza two days after gunmen from Islamist group Hamas killed 700 Israelis and abducted dozens more in the deadliest raid into Israeli territory since Egypt and Syria's attacks in the Yom Kippur war 50 years ago.
Hamas fighters also continued to cross into Israel from Gaza, the spokesman said.
Fighter jets, helicopters and artillery struck over 500 Hamas and Islamic Jihad targets in the Gaza Strip overnight, with targets including Hamas and Islamic Jihad command centres and the residence of senior Hamas official Ruhi Mashtaa who allegedly helped direct the infiltration into Israel.
Medics in Gaza said at least seven Palestinians were killed in two Israeli air strikes on two houses. Israeli planes carried out dozens of air strikes, many in the northern town of Beit Hanoun.
Israeli air strikes on Sunday hit housing blocks, tunnels, a mosque and homes of Hamas officials in Gaza. The Palestinian health ministry said more than 400 people including scores of children had been killed.
"The price the Gaza Strip will pay will be a very heavy one that will change reality for generations," said Defence Minister Yoav Gallant in the town of Ofakim, which suffered casualties and had hostages taken.
Israeli military spokesperson Lieutenant Colonel Jonathan Conricus said the country had called in around 100,000 soldiers.
"Our job is to make sure that at the end of this war, Hamas will no longer have any military capabilities to threaten Israeli civilians with, and in addition to that we also need to make sure Hamas will not govern the Gaza Strip," he said.
Oil prices were up more than $3 a barrel in Asian trade on Monday as the violence deepened political uncertainty across the Middle East and raised concerns about supplies from Iran.
Iran is an ally of Hamas and while it congratulated Hamas on the attack, its mission to the United Nations said Tehran was not involved in the attacks.
Any sustained rally in oil prices would act as a tax on consumers and add to global inflationary pressures, which weighed on equities as S&P 500 futures shed 0.7% and Nasdaq futures lost 0.6%.
Several international air carriers have suspended flight services with Tel Aviv in light of the Hamas attack, saying they are waiting for conditions to improve before resuming.
Beyond blockaded Gaza, Israeli forces and Lebanon's Iran-backed Hezbollah militia exchanged artillery and rocket fire on Sunday, while in Egypt, two Israeli tourists were shot dead along with a guide.
Appeals for restraint came from around the world, though Western nations largely stood by Israel.
The Palestinian foreign ministry denounced what it called a "barbarous campaign of death and destruction" by Israel.
"As an occupying power, Israel has no right or justification to target the defenceless civilian population in Gaza or elsewhere in Palestine," it said on Sunday.
In southern Israel, Hamas gunmen were still fighting Israeli security forces after their surprise assault with rocket barrages and bands of gunmen who overran army bases and invaded border towns.
"It's taking more time than we expected to get things back into a defensive, security posture," Lt. Col. Richard Hecht told a briefing with journalists.
CAPTIVES
Israel's military, which faces awkward questions for not thwarting the attack, said it had regained control of most infiltration points along security barriers, killed hundreds of attackers and taken dozens more prisoner.
Tens of thousands of soldiers had been around Gaza, a narrow strip of land that is home to 2.3 million Palestinians, and the military was starting to evacuate Israelis around the frontier.
Israel has not released an official toll but its media said at least 700 people were killed in Saturday's attacks, children among them. Military spokesperson Daniel Hagari called it "the worst massacre of innocent civilians in Israel's history."
Several Americans were killed by Hamas attackers, a White House National Security Council spokesperson confirmed. Thailand said 12 of its nationals had been killed and 11 kidnapped.
Palestinian fighters took dozens of hostages to Gaza, including soldiers and civilians, children and the elderly. A second Palestinian militant group, Islamic Jihad, said it was holding more than 30 of the captives.
About 30 missing Israelis attending a dance party that was attacked by gunmen emerged from hiding on Sunday, Israeli media reported, putting the death toll at the outdoor gathering at 260.
"The cruel reality is Hamas took hostages as an insurance policy against Israeli retaliatory action, particularly a massive ground attack and to trade for Palestinian prisoners," said Aaron David Miller, a senior fellow at the Carnegie Endowment for International Peace.
UNABATED VIOLENCE
U.S. President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu for the second straight day on Sunday, saying in a post on the social media platform X that he expressed "my full support for the people of Israel in the face of an unprecedented and appalling assault by Hamas terrorists."
The United States led Western denunciations of Hamas' attack, with Biden issuing a warning to Iran and others that this was "not a moment for any party hostile to Israel to exploit these attacks."
U.S. Defense Secretary Lloyd Austin said he had ordered the USS Gerald R. Ford Carrier Strike Group to the eastern Mediterranean as a show of support to Israel.
In Gaza, Hamas spokesperson Hazem Qassem condemned the U.S. announcement as "an actual participation in the aggression against our people".
The violence may undermine U.S.-backed moves towards normalising relations between Israel and Saudi Arabia - a security realignment that could threaten Palestinian hopes of self determination and hem in Hamas' main backer, Iran.
Tehran's other main regional ally, Lebanon's Hezbollah, fought a war with Israel in 2006 and said its "guns and rockets" stand with Hamas.
The escalation follows surging violence between Israel and Palestinian militants in the Israeli-occupied West Bank, where a Palestinian authority exercises limited self-rule, opposed by Hamas that wants Israel destroyed.
Conditions in the West Bank have worsened under Netanyahu's hard-right government, with more Israeli raids and assaults by Jewish settlers on Palestinian villages, and the Palestinian Authority called for an emergency Arab League meeting.
Hamas leader Ismail Haniyeh said the assault would spread to the West Bank and Jerusalem. Gazans have lived under an Israeli-led blockade for 16 years, since Hamas seized control of the territory in 2007.
"How many times have we warned you that the Palestinian people have been living in refugee camps for 75 years, and you refuse to recognise the rights of our people?" Haniyeh said.
The U.N. appealed for the creation of humanitarian corridors to bring food into Gaza and said at least 70,000 Palestinians in Gaza are seeking shelter in schools it runs.
