At least 700 Israelis have been killed in Israel's ongoing military escalation with Palestinian groups in Gaza, local media reported on Sunday.

More than 2,100 Israelis have also been injured as its army continues to face off against Palestinian fighters, the Times of Israel news website reported, citing a health official.

Al-Qassam Brigades, the armed wing of Hamas, the Palestinian group that governs the Gaza Strip, launched on Saturday Operation Al-Aqsa Flood, saying the surprise attack on Israel was in response to the storming of the Al-Aqsa Mosque and increased settler violence. It said it fired rockets and captured many Israelis.

In retaliation, the Israeli army initiated Operation Swords of Iron against Hamas in the Gaza Strip.

At least 370 Palestinians have also been killed as fighting continued for the second day on Sunday, according to health officials.

Israel declared a state of war, with Prime Minister Benjamin Netanyahu vowing a large-scale offensive in Gaza.