Israel's military said its forces, backed by a helicopter and drones, clashed with militants inside Israeli territory late on Tuesday.
Soldiers killed three militants in the incident in Ashkelon, starting a fire in an industrial area close to an oil terminal located just over 10 kilometres from the Gaza Strip that has been shut in the wake of the attacks, it said.
Israeli aircraft struck more than 70 targets overnight in Daraj Tuffah, a district of Gaza City that had been used by Hamas to direct attacks, the military said.
Hamas-affiliated media said strikes hit homes in Gaza City and the southern city of Khan Younis.
A strike on a home in Gaza City's Sabra neighbourhood killed five people, according to a medical official.
Residents appealing for help on social media said many buildings had collapsed, sometimes trapping as many as 50 people inside with rescue workers unable to reach them.
On Saturday, Hamas gunmen from the Gaza Strip rampaged through parts of southern Israel, killing hundreds of people in the deadliest Palestinian militant attack in Israel's history.
Israel vowed to escalate its response to an attack by the Palestinian militant group Hamas with a ground offensive, while US President Joe Biden pledged support for Israel and issued a warning to anyone who might seek to take advantage of the situation.
Israel's embassy in Washington said on Tuesday the death toll from the weekend Hamas attacks had surpassed 1000. Public broadcaster Kan reported the figure had reached 1200. The victims were overwhelmingly civilians, gunned down in homes, on streets or at an outdoor dance party. Scores of Israelis and others from abroad were captured and taken to Gaza as hostages, some shown on social media being paraded through the streets.
Gaza's health ministry said Israel's retaliatory air strikes had killed at least 900 people and wounded 4600 up to Tuesday.
- Reuters
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