Israel battles Hamas for a second day after mass incursion and trades fire with Lebanon's Hezbollah

Israeli soldiers battled Hamas fighters in the streets of southern Israel on Sunday and launched retaliation strikes that levelled buildings in Gaza, while in northern Israel a brief exchange of strikes with Lebanon's Hezbollah militant group raised fears of a broader conflict.

Israeli soldiers battled Hamas fighters in the streets of southern Israel on Sunday and launched retaliation strikes that levelled buildings in Gaza, while in northern Israel a brief exchange of strikes with Lebanon's Hezbollah militant group raised fears of a broader conflict.

There was still some fighting underway more than 24 hours after an unprecedented surprise attack from Gaza, in which Hamas militants, backed by a volley of thousands of rockets, broke through Israel's security barrier and rampaged through nearby communities. They took captives back into the coastal Gaza enclave, including women, children and the elderly, who they will likely try to trade for thousands of Palestinian prisoners held by Israel. Hundreds have been killed on both sides.

The high death toll, multiple captives and a slow response to the onslaught pointed to a major intelligence failure and undermined the long-held perception that Israel has eyes and ears everywhere in the small, densely populated territory it has controlled for decades.

Israeli Prime Minister Benjamin Netanyahu said the country was at war and would exact a heavy price from its enemies. Hamas leaders said they were prepared for further escalation.

A major question now was whether Israel will launch a ground assault into Gaza, a move that in the past has brought intensified casualties. Netanyahu vowed that Hamas "will pay an unprecedented price." But, he warned, "This war will take time. It will be difficult."

Civilians paid a staggering cost for the violence on both sides. Israeli media, citing rescue service officials, said at least 300 people were killed in Israel, including 44 soldiers, while officials in Gaza said 313 people had died in the territory. An Israeli official said the military had killed 400 militants and captured dozens more.

Israeli TV news aired a stream of accounts from the relatives of captive or missing Israelis, who wailed and begged for assistance amid a fog of uncertainty surrounding the fate of their loved ones. In Gaza, residents fled homes near the border to escape Israeli strikes, fleeing deeper inside the territory after warnings in Arabic from the Israeli military.