Photos: Almost 1,000 killed in Israel war with Hamas; Gaza turns into rubble as Netanyahu warns residents to flee

The death toll surged to almost 1,000 since Palestinian militant group Hamas launched its massive surprise attack on Israel with a barrage of rockets and a large-scale ground assault, officials on both sides said on Sunday.

The conflict's worst escalation in decades has claimed more than 600 lives on the Israeli side, the government press office said, while Gaza officials reported at least 370 deaths, with thousands more wounded on each side.

Thousands of Israeli forces were deployed to battle holdout Hamas fighters in the south and the airforce again pounded targets in the Gaza Strip as Israeli Prime Minister Benjamin Netanyahu warned of a "long and difficult" war ahead.

Gun battles raged in towns and on highways as the Israeli army sought to secure desert regions near the coastal enclave, rescue Israeli hostages and evacuate all areas near Gaza within 24 hours.

"We'll reach each and every community until we kill every terrorist in Israel," vowed military spokesman Daniel Hagari, a day after hundreds of Hamas fighters launched their shock offensive and surged into Israel using vehicles, boats and even motorised paragliders.

There was widespread shock and dismay in Israel after at least 100 citizens were captured by Hamas gunmen and abducted into Gaza, with images circulating on social media of bloodied hostages, and distraught relatives pleading for the state to rescue them.

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

"That's the only confirmation we have," she told AFP by phone, her voicing breaking with emotion, and adding there was no information on her cousin's husband and her elderly parents.

"After the army took control of the kibbutz, they weren't at home," she said. "We assume they were kidnapped ... We want to know what their condition is, we want them to return safe. They're innocent civilians."

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

Israel responded with artillery strikes across the UN-patrolled border. "We recommend Hezbollah not to come into this," said army spokesman Richard Hecht. "If they come, we are ready."

Israel was stunned when Hamas launched their multi-pronged offensive at dawn Saturday, the Jewish Sabbath, raining down thousands of rockets as fighters infiltrated towns and kibbutz communities and stormed an outdoor rave party held under the desert sky.

Panicked Israeli residents phoned media outlets as they hid out in their homes from militants going door to door and shooting civilians or dragging them away.

Two Thai nationals were among those killed, and other Asian nationals, many of whom work as farm labourers in the region, were believed to be among the hostages.

"A lot of people have been killed," said Hecht, after the military released the names of 26 fallen soldiers. "We lost soldiers, lost commanders and lost a lot of civilians.

In a speech, Hamas leader Ismail Haniyeh highlighted threats to Jerusalem's Al-Aqsa Mosque, the continuation of the blockade on Gaza and Israeli normalisation with countries in the region. "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?"

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