About 50 Israeli hostages are being held by Hamas militants in Beeri Kibbutz near the Gaza border, Israeli media reported on Saturday.
At least 100 Israelis were killed during the fighting with Hamas militants, Israel's N12 News reported.
Earlier in the day, the Magen David Adom emergency medical services had put the death toll at 40 Israelis.
"Since the morning hours, MDA teams provided medical care to hundreds of casualties," Magen David Adom said, while the Israeli Health Ministry confirmed that at least 779 people had been wounded and taken to hospitals.
In Gaza, the Palestinian Health Ministry announced at least 198 people have been killed so far, with 1,610 wounded following Israeli strikes on the enclave.
Hamas militants have launched the biggest attack on Israel in years, in a surprise assault involving gunmen crossing the border from Gaza as well as a heavy barrage of rockets from the Palestinian enclave.
Air raid sirens sounded across Israel. Warnings of incoming rockets were heard for several minutes in southern areas surrounding Gaza and in the greater Tel Aviv and Jerusalem areas.
The latest escalation in violence comes after more than a week of tensions in Israel after soldiers shot and killed two Palestinians in the occupied West Bank on Thursday.