Israel pounds Gaza, prepares to mount a ground offensive

Israel imposed a total siege on the Gaza Strip on Monday and cut off the water supply as it kept bombing targets in the crowded Palestinian enclave in response to the Hamas surprise assault it has likened to the 9/11 attacks.

Reeling from the unprecedented ground, air and sea attacks, Israel has launched a withering barrage of strikes on Gaza that have killed 560 people there, while reports from Israeli media said the death toll from the Hamas attack that began on Saturday had climbed to 900.

The skies over Gaza were blackened by plumes of smoke from deafening explosions as Hamas kept launching rockets as far as Tel Aviv and Jerusalem, where missile defence systems fired and air raid sirens blared.

Hamas whose militants surged into Israeli towns on Saturday, spraying gunfire at civilians and dragging off about 100 hostages - claimed on Monday that Israeli air strikes had killed four of the captives. Hours later, a spokesperson for the outfit's armed wing said it will begin executing an Israeli civilian captive in return for any new Israeli bombing of civilian houses without pre-warning.

Israel said it had called up 300,000 army reservists for its "Swords of Iron" campaign, and truck convoys were moving tanks to the south, where its forces had dislodged the last holdout Hamas fighters from embattled towns.

"We are in control of the communities," said military spokesman Daniel Hagari, cautioning that some "terrorists" may remain after about 1,000 militants had swarmed into the region on the Jewish Sabbath.