UPDATE | Dozens of Israeli soldiers captured in surprise incursion, says Hamas

JERUSALEM (AP) — The Hamas militant group says it is holding “dozens” of Israeli soldiers captive in the Gaza Strip following a surprise deadly attack on the country Saturday. 

Earlier on Saturday, Hamas militants fired thousands of rockets and sent dozens of fighters into Israeli towns near the Gaza Strip in an unprecedented attack during a major Jewish holiday, killing more than 100 Israelis and stunning the country.

Israel said it is now at war with Hamas and launched airstrikes in Gaza, vowing to inflict an “unprecedented price.”

Abu Obeida, spokesman for the group's military wing, said the soldiers, including some officers, were captured during a surprise infiltration into southern Israel on Saturday.

He said the captives were being held in “safe places” and militant tunnels.

If true, the claim could set the stage for complicated negotiations on a prisoner swap with Israel, which is holding thousands of Palestinians in its prisons.

Israel in the past has agreed to lopsided exchanges in order to bring captive soldiers home.

Hours after the incursion began, Israeli troops were still fighting Hamas gunmen in 22 locations near the Gaza Strip, including towns and other communities, army spokesman Daniel Hagari said — a startling sign of the breadth of the assault.

Israel's national rescue service said at least 100 people were killed and hundreds wounded, making it the deadliest attack in Israel in years. An unknown number of Israeli soldiers and civilians were also seized and taken into Gaza, an enormously sensitive issue for Israel. Hagari said militants were holding hostages in standoffs in two towns, Beeri and Ofakim, which is 15 miles (24 kilometres) from the Gaza border.

At least 198 people in the Gaza Strip have been killed and at least 1,610 wounded in Israel's retaliation, the Palestinian Health Ministry said. Airstrikes in the evening flattened a 14-story residential tower that also holds Hamas offices in central Gaza City. Israeli fired a warning just before, and the number of casualties was not immediately known.

The strength, sophistication and timing of the attack shocked Israelis. Hamas fighters used explosives to break through the border fence enclosing the long-blockaded Mediterranean territory, then crossed with motorcycles, pickup trucks, paragliders and speed boats on the coast.

Bodies of dead Israeli civilians and Hamas militants were seen on streets of Israeli towns. Associated Press photos showed an abducted elderly Israeli woman surrounded by gunmen being brought back into Gaza on a golf cart and another woman squeezed between two fighters on a motorcycle. Images on social media appeared to show fighters parading what seemed to be captured Israeli military vehicles through Gaza streets and a dead Israeli soldier being dragged and trampled by crowd of Palestinians.

The conflict threatened to spiral dramatically further. Previous conflicts between Israel and Gaza's Hamas ruler brought widespread death and destruction in Gaza and days of rocket fire on Israeli towns. The mix is potentially more volatile now, with Israel's far-right government stung by the security breach and with Palestinians in despair over a never-ending occupation.

“We are at war,” Israeli Prime Minister Benjamin Netanyahu said in a televised address, declaring a mass army mobilisation. “Not an 'operation,' not a 'round,' but at war.”

“The enemy will pay an unprecedented price,” he added, promising that Israel would “return fire of a magnitude that the enemy has not known.”

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