At least 22 people have been killed in Israel after a major surprise attack with militants crossing into Israel from Gaza during heavy rocket fire.
There are unconfirmed reports that several Israelis have been taken captive back into Gaza.
Israel has launched waves of air strikes on targets in Gaza in response.
Israeli Prime Minister Benjamin Netanyahu said Israel is “at war” and has vowed that Hamas, Gaza’s rulers, will “pay a price it has never known”.
The militants crossed the perimeter fence just after dawn, as barrages of rockets were launched from Gaza.
The Israeli military has said that dozens of fighter jets are carrying out air strikes on Hamas sites in Gaza and that it has mobilized tens of thousands of reservists.
At least one Palestinian has been killed in the strikes, local health officials say.
The rocket barrages from Gaza began just after dawn on Saturday, the Jewish Sabbath and the day of the festival of Simchat Torah.
As sirens sounded across Israel, the IDF announced that “terrorists” had infiltrated Israeli territory “in several different locations”.
It told civilians in southern and central areas to stay next to shelters and inside shelters in the area surrounding Gaza.
Footage posted online appeared to show a group of heavily armed Palestinian militants dressed in black fatigues driving around Sderot in a pick-up truck.
