Hamas gunmen rampaged through Israeli towns and killed at least 250 people on Saturday while retreating with soldier and civilian hostages in the deadliest day of violence for Israel since the Yom Kippur War 50 years ago.

Israel responded with devastating retaliatory strikes, killing more than 230 Palestinians in the besieged Gaza Strip.

The Israeli military was still fighting with Hamas in some parts of southern Israel as of 1:30am (10:30 GMT) and the situation in the country was not totally under control.

Hamas, which governs Gaza, said its unprecedented offensive by land, air and sea was in response to the desecration of the Al Aqsa Mosque and Israeli atrocities against Palestinians over the decades.

Israeli Prime Minister Benjamin Netanyahu promised to fight Hamas to the bitter end and told Gazans who are under Israel’s land, air and sea blockade to “leave the territory now”.

“We will take mighty vengeance for this black day,” Netanyahu said in a televised address. “We will take revenge for all the young people who lost their lives. We will target all of Hamas’s positions. We will turn Gaza into a deserted island. To the citizens of Gaza, I say. You must leave now. We will target each and every corner of the strip.”

Hamas leader Ismail Haniyeh said the assault that began in Gaza would spread to the occupied West Bank and Jerusalem.

“This was the morning of defeat and humiliation upon our enemy, its soldiers and its settlers,” Haniyeh said in a speech. “What happened reveals the greatness of our preparation. What happened today reveals the weakness of the enemy.”

‘Kill and capture’

Late on Saturday in southern Israel, residents had yet to be given the all-clear to leave shelters where they hid from the assailants since the early hours.

In Gaza, black smoke and orange flames billowed into the evening sky from a high-rise tower hit by an Israeli air strike. Crowds of mourners carried the bodies of fighters wrapped in green Hamas flags through the streets.

Gaza’s dead and wounded were carried into crumbling and overcrowded hospitals with severe shortages of medical supplies and equipment. The health ministry said 232 people had been killed and at least 1,700 wounded.

Saleh al-Arouri, the deputy chief of Hamas’s political bureau, told Al Jazeera that Hamas was holding a large number of Israeli captives, including senior military officials. He said Hamas had enough captives to make Israel free all Palestinians in its jails.

“We managed to kill and capture many Israeli soldiers,” he said.

While world leaders called for restraint, many observers predicted a major ground assault on Gaza is likely in the works.

“There’s going to be a second act and that is an invasion of Gaza, and I think larger than 2014 when Israel called up 80,000 reserves,” said Yonah Jeremy Bob, a military analyst for the Jerusalem Post.

“Within a day or two, Israel will have a massive force that will be able to overwhelm Hamas forces in Gaza,” Bob told Al Jazeera.

‘World is watching’

United States President Joe Biden decried the “unconscionable” assault by Hamas fighters and pledged to ensure Israel has “what it needs to defend itself”. He told Netanyahu that the US “stands with the people of Israel”.

“Israel has the right to defend itself and its people, full stop. There’s never a justification for terrorist attacks and my administration’s support for Israeli’s security is rock solid and unwavering,” said Biden.

Biden also warned Israel’s enemies that “this is not a moment for any party hostile to Israel to exploit these attacks to seek advantage. The world is watching”.

Egypt is in talks with Saudi Arabia and Jordan in a bid to defuse Palestinian-Israeli tensions, the Egyptian foreign ministry said.

Across the Middle East, there were demonstrations in support of Hamas with Israeli and US flags set on fire and marchers waving Palestinian flags in Iraq, Lebanon, Syria and Yemen.

In Iran, Israel’s regional archenemy, members of parliament opened their session on Saturday by chanting, “Death to Israel” and “Israel will be doomed, Palestine will be the conqueror”.

Iran’s foreign ministry spokesman Nasser Kanaani said, “Today’s operation created a new page in the field of resistance and armed operation against occupiers.”

In Lebanon’s Palestinian refugee camps, hundreds took to the streets to celebrate the Hamas operation.

‘Do whatever it takes’

Danny Danon, a member of Israel’s Knesset or parliament, said a response against Hamas is coming.

“The people in Gaza will have to take into consideration they will have to pay a price. Unlike Hamas, we have no intention of hurting civilians, but when we hunt Hamas we will be strong, we will be efficient, and we will do whatever it takes to hunt them down,” Danon told Al Jazeera.

“We will not sit idly by after more than 200 Israeli civilians were butchered, massacred today on our Jewish holiday.”

Ali Abunimah, the co-founder of The Electronic Intifada website, said 80 years of Israeli repression and “massacres” in Palestine was the reason behind the violence carried out on Saturday.

“The Palestinian people are struggling justly for their liberation. An Indigenous people fighting for their existence will fight back with great motivation to decades of living under the boot of this colonial regime whose brutality is being highlighted by the response from Israeli leaders,” he told Al Jazeera.