Jerusalem and Gaza (CNN) — Israel formally declared war on Hamas on Sunday, setting the stage for a major military operation in Gaza as fighting rages on Israeli soil following Saturday’s surprise assault by the Islamist militant group in which hundreds of Israelis were killed.

The shock terror attack led to the deadliest day in decades for Israel and came after months of surging violence between Palestinians and Israelis, with the long-running conflict now heading into uncharted and dangerous new territory. Questions are also swirling over how the Israeli military and intelligence apparatus appeared to be caught off guard in one of the country’s worst security failures.

Israeli Prime Minister Benjamin Netanyahu has vowed retaliation, warning his country would take “mighty vengeance” and was readying for “a long and difficult war” ahead. He urged Palestinians living in Gaza to “leave now.”

Throughout Saturday and into Sunday, Hamas launched thousands of rockets from the Gaza Strip into Israel – making direct hits on multiple locations inside the country including Tel Aviv – while armed terror groups entered Israel and infiltrated military bases, towns and farms, shooting at civilians and taking hostages.

The number of dead in Israel following the attack by Hamas on Saturday is likely to be over 500, CNN analysis suggests. More than 2,000 have been injured, according to the Israeli heath ministry.

Israel has responded by launching air strikes on what it said were Hamas targets in Gaza, while its forces clashed on the ground with Hamas fighters in villages, army bases and border crossings. Netanyahu said that the military was “clearing terrorists” out of Israeli communities and “restoring control.”

Israeli warplanes continued to pound Gaza on Sunday morning with the Israel Defense Forces saying it had struck 426 targets in Gaza, including 10 towers used by Hamas. Israel said that drones were used overnight Saturday to strike “a number of terrorist squads in the area surrounding the Gaza Strip.”

In Gaza, at least 370 Palestinians have died and another 2,200 have been wounded in the airstrikes, the Palestinian health ministry said. The toll included 20 dead and 121 wounded children, the ministry added.

The Israeli leader said the “first phase” of the operation had ended with the “destruction of the majority of the enemy forces that penetrated our territory.”

Netanyahu announced Israeli forces have started an “offensive formation” which will continue “until the objectives are achieved.” Among the decisions made by the cabinet is to stop the supply of electricity, fuel and goods to Gaza.

Complicating Israel’s response is that “significant number” of Israeli nationals were taken by Hamas as hostages and are being held at locations across Gaza.

“People have been kidnapped into Gaza, not only soldiers but civilians, children, grandmothers,” said Israeli Defense Forces spokesman Lt. Col. Richard Hecht told a briefing on Sunday. “We have lost soldiers, we have lost commanders, we have lost a lot of civilians.”

It has been more than 17 years since an Israeli soldier was taken as a prisoner of war in an assault on Israeli territory. And Israel has not seen this kind of infiltration of military bases, towns and kibbutzim since town-by-town fighting in the 1948 war of independence.

Palestinian militant group Hamas said the captured Israeli hostages are being held across Gaza and warned against attacks in the area.

“Threatening Gaza and its people is a losing game and a broken record,” said Abu Obaida spokesman for the Al Qassam Brigades, the armed wing of Hamas in a recorded audio message late Saturday. “What happens to the people of the Gaza Strip will happen to them and beware of miscalculation.”

Earlier the group claimed to have captured “dozens” of Israelis, including soldiers, and were holding them in “safe places and resistance tunnels.”

On Sunday, Hecht said the IDF had neutralized most of the significant battles that took place in the settlement of Otef, but there are still ongoing operations in numerous other parts of the country. The IDF’s goal for the next 12 hours is to “end the Gaza enclave … and kill all the terrorists in our territory,” he said.

“We are probably going to try to evict certain communities in areas of Gaza,” he added.

The IDF is evacuating more than 20 communities adjacent to the Gaza security fence, and searching the area for any Hamas militants left. It is also seeking to control breaches in the fence.

Asked by a journalist about the intelligence failure that had allowed such a large scale attack to occur, Hecht said: “This is not a question for now … I am sure that will be a big discussion down the road.”

‘No warning of any kind’

The highly coordinated assault, which began Saturday morning, was unprecedented in its scale and scope and came on the 50th anniversary of the 1973 War in which Arab states blitzed Israel on Yom Kippur, the holiest day of the Jewish calendar.

“We had no warning of any kind, and it was a total surprise that the war broke out this morning,” Efraim Halevy, the former head of Mossad, Israel’s Intelligence Service, told CNN.

The number of rockets fired by Palestinian militants was at a scale “never seen before,” Halevy said, and this was “the first time” that Gaza has been able to “penetrate deep into Israel and to take control of villages.”

It is rare for Palestinian militants to be able to make it into Israel from Gaza which is sealed off and heavily watched by Israel’s military. Gaza is one of the most densely packed places in the world, an isolated coastal enclave of almost 2 million people crammed into 140 square miles.

Governed by Hamas, the territory is largely cut off from the rest of the world by an Israeli blockade of Gaza’s land, air and sea dating back to 2007. Egypt controls Gaza’s southern border crossing, Rafah. Israel has placed heavy restrictions on the freedom of civilian movement and controls the importation of basic goods into the narrow coastal strip.

Fighting between the two sides has surged in the last two years. The violence has been driven by frequent Israeli military raids in Palestinian towns and cities, which Israel has said are a necessary response to a rising number of attacks by Palestinian militants on Israelis.

They also come at a moment of deep division in Israel, months after the country’s right-wing government pushed through a contentious plan to reduce the power of the country’s courts, sparking a social, political and military crisis.

Western states condemned the Hamas attack on Saturday and pledged support for Israel while Arab states, including those that have recognized Israel, called for calm.

United States President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu on Saturday and said that Washington “unequivocally condemns this appalling assault against Israel by Hamas terrorists from Gaza.”

Saudi Arabia, which is holding talks with the US to potentially normalize relations with Israel, said it is following closely the “unprecedented” situation and called on “both sides to immediately stop the escalation,” according to a statement by the Saudi foreign ministry on X.

Pleas for release of hostages

Israelis are sharing photos of friends and family who they say have been kidnapped by Hamas militants, many of them women and children.

One Israeli mother told CNN she had been on the phone with her children, aged 16 and 12, who were home alone when they heard gunshots outside and people trying to enter.

“They were scared to death. I can’t even imagine what they felt. And I wasn’t there to help,” said the mother, who was away from the home at the time. CNN is not identifying the mother and her children for safety reasons.

Then, over the phone, she heard the door break down.

“I heard terrorists speaking in Arabic to my teenagers. And the youngest saying to them ‘I’m too young to go,’” the mother said. “And the phone went off, the line went off. That was the last time I heard from them.”

Another Israeli resident Yoni Asher told CNN his wife, who was visiting near the Gaza border with their young daughters, was among those abducted. On Saturday he tracked her phone and saw it was located in Gaza; later that day he said he recognized her in a viral clip of people loaded into the back of a truck flanked by Hamas militants.

Several people were taken hostage during an attack by Hamas militants on an Israeli music festival near the Israel-Gaza border. One video on social media showed an Israeli woman being kidnapped, hoisted onto the back of a motorcycle and driven away as her boyfriend was apprehended. Another clip pictured a German-Israeli woman who was taken from the festival being paraded around Gaza, unconscious and motionless.

An Israel Police spokesperson has told CNN that family members who wish to report their loved ones as missing to come to the nearest police station when it’s safe to leave their homes. The police suggested relatives bring photos and personal items from which DNA samples can be extracted to help with identification.

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