Israel’s Prime Minister Benjamin Netanyahu has warned people living in Gaza to leave as he vowed to turn parts of the territory “into ruins”.
Mr Netanyahu earlier declared Israel was at war after Hamas militants broke out of the blockaded Gaza Strip on Saturday to launch an early morning attack.
Rescue service officials have told Israeli media at least 250 people, including 26 soldiers, were killed in the deadliest attack on Israel in decades with 1,500 wounded.
The Palestinian Health Ministry said at least 232 people had died and 1,700 wounded in airstrikes by Israel on the blockaded territory.
“All the places that Hamas hides in, operates from, we will turn them into ruins. Get out of there now.”
Israel will stop supplying electricity, fuel and goods to Gaza, according to a statement from Mr Netanyahu’s office on Saturday night.
Much of Gaza was already thrown into darkness by nightfall after electrical supplies from Israel, which supplies almost all of the territories’ power, were cut off earlier in the day.
Mr Netanyahu also said the “first phase” of the counter operation had ended, and that Israel had fought off the majority of Hamas militants.
Hamas gunmen targeted up to 22 locations in the initial assault with gun battles continuing well after nightfall. Militants held hostages in two towns and occupied a police station in a third.
After nightfall, Israeli airstrikes in Gaza intensified, flattening several residential buildings in giant explosions, including a 14-storey tower that held dozens of apartments as well as Hamas offices in central Gaza City.
Israeli forces fired a warning just before and there were no reports of casualties.
Soon after, a Hamas rocket barrage into central Israel hit four cities, including Tel Aviv and a nearby suburb, where two people were seriously injured.
In the southern Gaza city of Rafah, an Israeli airstrike late on Saturday flattened a home, killing 12 members of the Abu Qouto family, neighbours said. Ten members of a family in the northern town of Jebalya were killed in another airstrike, relatives said. It was not known why the homes were targeted.
Palestinians demonstrated in towns and cities around the West Bank on Saturday night amid the offensive from Gaza and Israeli retaliation. Palestinian health officials said Israeli fire killed five there, but gave few details.
President Joe Biden said from the White House that he had spoken with Mr Netanyahu to say the United States “stands with the people of Israel in the face of these terrorist assaults”.
He said: “Israel has the right to defend itself and its people, full stop.”
King Abdullah of Jordan spoke to Mr Biden and called for intensifying international efforts to stop the escalation of violence, while Saudi foreign minister Prince Faisal bin Farhan has spoken to US Secretary of State Antony Blinken to urge a halt to the violence in and around Gaza.
Prince Faisal emphasised “the kingdom’s rejection of the targeting of civilians and the need for all sides to respect international humanitarian law”.
The Saudis have been in talks with the White House over potentially forging diplomatic relations with Israel.
The Hamas incursion on Simchat Torah, a normally joyous day when Jews complete the annual cycle of reading the Torah scroll, revived painful memories of the 1973 Mideast war practically 50 years to the day, in which Egypt and Syria launched a surprise attack on Yom Kippur, the holiest day of the Jewish calendar, aiming to take back Israeli-occupied territories.
Comparisons with one of the most traumatic moments in Israeli history sharpened criticism of Mr Netanyahu and his far-right allies, who had campaigned on more aggressive action against threats from Gaza.
Hamas’ military wing claimed it was holding dozens of Israeli soldiers captive in “safe places” and tunnels in the Gaza Strip.
The Israeli military confirmed that a number of Israelis were abducted but would not give a figure.
Airlines cancelled more than 80 flights to and from Tel Aviv by Saturday evening — roughly 14% of all flights scheduled — because of the unprecedented attack in Israel by the militant group Hamas, according to the website FlightAware.