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Israel is now in an official state of war as fighting with Hamas rages, the government has said.
“The political-security cabinet last night approved the state of war and, accordingly, the taking of significant military operations. This is in accordance with Article 40 of the Basic Government Law,” the office of Prime Minister Benjamin Netanyahu said on Sunday afternoon.
“The war that was forced on the State of Israel in a murderous terrorist assault from the Gaza Strip began at 6am yesterday,” it added.
The cabinet decision has to be formally approved by the parliament's foreign affairs and defence committee, after which Mr Netanyahu will announce the decision before the Knesset.
Israel launched a wave of air strikes on Gaza after hundreds of Hamas militants crossed into Israel on Saturday morning.
Almost 1,000 people have been killed in two days of fighting in Israel and Gaza. About 2,000 people have been injured on each side.
The death toll in Israel is now at 600, according to Israeli media reports, with at least 320 killed in Gaza, according to the Palestinian Health Ministry.
There has been no official confirmation of the number of deaths on the Israeli side.
An unknown number of Israelis and foreign nationals were taken hostage by Hamas, which said it would release the exact number some time on Sunday.
The violence is unlike anything seen in Israel or Gaza in recent years.
The Palestinian Health Ministry said 572 Palestinians have been killed in Israel-related violence this year, more than half of them in the past two days.
The latest fighting has also stoked tensions with neighbouring Lebanon, from which Hezbollah fired artillery and rockets on Sunday morning.
In the occupied West Bank, hospitals declared a state of emergency and have offered to treat wounded Gazans, although most governorates were placed under lockdown on Sunday.
Classes across Israel have been cancelled for the next two days, the Home Front Command has announced.
Access to towns in the south has also been restricted as fighting continues.
On Sunday, Hamas said more militants entered kibbutzes in southern Israel, where police stations were overrun on Saturday and armed militants shot at residents on the street.
Gaza has been under an Israeli and Egyptian blockade since 2007 and residents of the densely-populated enclave have endured several wars with Israel.
