Israeli media are reporting Monday that more than 900 people were killed in Hamas' multi-pronged attack on the country's south.
The rising death toll comes as Israel has ordered a complete siege on the Gaza Strip, from which Hamas launched the onslaught.
Israel's military has ordered a complete siege on the Gaza Strip, halting deliveries of food, water, fuel and supplies to its 2.3 million people as it pounded the Hamas-ruled territory with waves of airstrikes in retaliation for the militants' bloody weekend incursion.
More than two days after Hamas launched its surprise attack, the Israeli military said it had largely gained control in its southern towns where it had been battling Hamas gunmen. Israel's vaunted military and intelligence apparatus was caught completely off guard by Hamas, resulting in heavy battles in its streets for the first time in decades.
Israeli tanks and drones were deployed to guard breaches in the Gaza border fence to prevent new incursions. Thousands of Israelis were evacuated from more than a dozen towns near Gaza, and the military summoned 300,000 reservists a massive mobilisation in a short time.
The moves, along with Israel's formal declaration of war on Sunday, pointed to Israel increasingly shifting to the offensive against Hamas, threatening greater destruction in the densely populated, impoverished Gaza Strip.
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Already, civilians on both sides have suffered a terrible toll: around 700 people, including 73 soldiers, have been killed in Israel, and 493 people have been killed in Gaza, according to authorities on each side.
Israel says hundreds of Hamas fighters have been killed. Thousands have been wounded on both sides. Hamas and other militants in Gaza say they are holding more than 130 soldiers and civilians snatched from inside Israel.
In response to Israel's bombardment, the spokesman of Hamas' armed wing, Abu Obeida, said in an audio released Monday night that the group will kill one Israeli civilian captive any time Israel targets civilians in their homes in Gaza without prior warning. Israeli Foreign Minister Eli Cohen warned Hamas against harming any of the hostages, saying, This war crime will not be forgiven.