The Israeli army said it hit more than 500 targets in the blockaded and impoverished Gaza Strip in overnight clashes, while fighting persisted in seven to eight locations inside Israel around the enclave.

It came two days after Hamas launched a barrage of rockets and sent a wave of fighters who gunned down civilians and took at least 100 hostages in an massive attack that took Israel by surprise.

Sunday the government officially declared war on the Palestinian militant group that controls Gaza and Prime Minister Benjamin Netanyahu has warned Israel to prepare for a "long and difficult" conflict.

More than 700 Israelis have been killed since Hamas launched its large-scale attack, the Israel Defence Forces (IDF) said on Monday. Another 1,200 people have been wounded, many critically.

In retaliation, Israeli air strikes have hammered the impoverished and blockaded Gaza Strip, an enclave of 2.3 million people, with officials there reporting at least 413 Palestinian deaths.

"Overnight IDF fighter jets, helicopters, aircraft and artillery struck over 500 Hamas and Islamic Jihad terrorist targets in the Gaza Strip," the military said in a statement.

"We're still fighting. There are between seven to eight open places around Gaza (where) we have still warriors fighting terrorists," military spokesman Richard Hecht told reporters.

"We thought by yesterday (Sunday) we would have full control. I hope we will by the end of the day," he added.

Thick plumes of smoke billowed from the Palestinian enclave as the strikes continued in the early hours of the morning, an AFP correspondent reported.

Army spokesman Lieutenant Colonel Jonathan Conricus estimated around 1,000 Palestinian militants had participated in Hamas's assault on Saturday, which he called "by far the worst day in Israeli history".

"Never before have so many Israelis been killed by one single thing, let alone enemy activity in one day," he said. 

He likened it to "a 9/11 and a Pearl Harbour wrapped into one".

Conricus said around 100,000 reserve troops were deployed to the south as the army battles to expel Hamas fighters from Israeli territory.

A "very large amount" of Israeli civilians and soldiers were being held inside Gaza, he said.

Foreigners killed, abductions 

Israel's allies have responded by pledging fresh support, to confront what US President Jo Biden branded an "unprecedented terrorist assault" by Hamas.

Washington dispatched the USS Gerald R. Ford aircraft carrier and group of warships to the eastern Mediterranean, and US Defense Secretary Lloyd Austin said Washington said more equipment and resources will be on their way.

The conflict has had global impact, with several countries reporting nationals killed, abducted or missing.

At least four US citizens were killed in the attack, US Senate Majority Leader Chuck Schumer said in a statement, adding that the toll was likely to rise.

Thailand said at least 12 of its nationals were also killed while Nepal reported 10 deaths. They were all labourers working in Israel.

Israel was stunned when Hamas launched its multi-pronged offensive on Saturday, the Jewish Sabbath, with at least 3,000 rockets raining down as fighters infiltrated towns and kibbutz communities and stormed an outdoor rave where many revellers were shot dead.

Panicked Israelis hiding in their homes told reporters that militants were going door to door and shooting civilians or dragging them away.

At least 100 citizens were captured by Hamas and abducted into Gaza, with images circulating on social media of bloodied hostages.

Yifat Zailer, 37, said she was horrified to see video footage from Gaza that showed her cousin and the woman's children, aged nine months and three years. 

"That's the only confirmation we have," she said. 

Israel also came under attack from the north when Lebanon's Hezbollah launched guided missiles and artillery shells Sunday "in solidarity" with Hamas, without causing any casualties. 

Israel responded with artillery strikes across the UN-patrolled border. 

"We recommend Hezbollah not to come into this," army spokesman Richard Hecht said. "If they come, we are ready."

'Situation is unbearable' 

Netanyahu -- who leads a hard-right coalition government -- has vowed to turn Hamas hideouts "to rubble" and urged Palestinians there to flee.

Israeli attacks have levelled several Gaza residential towers and destroyed a mosque in Gaza's Khan Yunis, as well as hitting the central bank.

More than 20,000 people in Gaza have been displaced due to fighting, the United Nations Relief and Works Agency for Palestine refugees (UNRWA) said.

"The situation is unbearable psychologically and economically," said Amal al-Sarsawi, 37, as she took shelter in a classroom with her terrified children.

Western capitals have condemned the attack by Hamas, which the US and EU consider a terrorist group.

Oil prices soared more than four percent Monday, sparking concerns about possible supply shocks from the crude-rich region. 

Israel's foes have praised the assault, including Iran whose President Ebrahim Raisi voiced support when he spoke with the leaders of Hamas and the Islamic Jihad group.

Pro-Palestinian demonstrations took place in the United States, Iraq, Pakistan and other countries, while Germany and France were among nations stepping up security around Jewish temples and schools.

In the Egyptian city of Alexandria a police officer opened fire "at random" on Israeli tourists Sunday, killing two of them and their Egyptian guide before he was arrested.

'We will not give up' 

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

Its attack comes half a century after the 1973 invasion by Egyptian and Syrian forces, a conflict known in Israel as the Yom Kippur War, and has sparked bitter recriminations for what was widely seen as an intelligence failure.

"There was a very bad failure here," said Sderot resident Yaakov Shoshani, 70. "The Yom Kippur War was small compared to it, and I was a soldier in the Yom Kippur War."

Hamas chief Ismail Haniyeh has predicted "victory" and vowed to press ahead with "the battle to liberate our land and our prisoners languishing in occupation prisons".

An Israeli survivor of the attack on Sderot, Yitzhak, 67, said he now expected the army to "conquer Gaza house by house, clean the area there properly, and not leave Gaza until they get the very last rocket out of the ground." 

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