More than 600 Israelis are now feared dead and thousands more have been injured following an unprecedented attack by Hamas militants.
Israeli media said at least 600 people were killed and 2,000 wounded in Saturday's attack.
Hamas fighters have also taken an unknown number of civilians and soldiers captive into Gaza.
The Israel Defense Forces (IDF) has released footage of a missile strike it claims took place on a compound belonging to Hamas' head of military intelligence, adding it had also targeted two banks belonging to the terrorist organisation and aerial weapons production sites in Gaza.
'As of this hour, there are forces fighting in [Kibbutz] Kfar Aza, there are searches in a large number of towns. There are IDF forces in all towns, there is no town that does not have an IDF force in it,' he is quoted as saying in The Times of Israel.
Speaking at a briefing this morning, he added: 'Hamas' brutal attack is a war crime.
'Taking women and children captive violates international law and goes against Islam. Whoever took part will pay the price.
'The war is diffcult and challenging days lie ahead. The IDF is strong and will use every bit of its strength and power.'
Israeli ambassador to the United Kingdom Tzipi Hotovely has blamed Iran for supporting Hamas ahead of Saturday's attack.
She told Sunday Morning With Trevor Phillips on Sky News: 'Iran is backing up Hamas, Iran is destabilising the region with its proxies.
'We are willing to take a long fighting time to defend our people, we must make sure no one has a motivation to do that again.'
At least 26 Israeli soldiers have been killed in an attack by the Hamas militant group on the country´s south, Israel's military confirmed.
And at least 313 Palestinians have been killed, and nearly 2,000 injured, in retaliatory Israeli military action since yesterday, the country's health ministry has said.
Among them is British Nathanel Young, from London, was serving in the 13th Battalion of the Israeli Defence Forces (IDF) when he was killed yesterday, according to the IDF.
In a statement posted on social media, his family said: 'We're heartbroken to share that our little brother Nathanel Young was tragically killed on the Gaza Border yesterday.'
He is the first confirmed British casualty of the worst violence in the region for decades, after Palestinian militants launched cross-border raids early on Saturday morning.
