"We are putting a complete siege on Gaza... No electricity, no food, no water, no gas -- it's all closed," Gallant said in a video message, referring to the enclave that is overcrowded with 2.3 million people.

At least 700 people were killed in southern Israel when Hamas militants stormed across the border on Saturday, shooting people in the communities and towns near Gaza before Israeli security forces began fighting back.

An estimated 250 people were killed by Hamas gunmen at a music festival attended by young Israelis and foreigners near Kibbutz Reim, close to Gaza, according to an organisation that helped to recover the bodies.

"We are fighting animals and are acting accordingly," Gallant said in Hebrew.

At least 493 people have also been killed in the Gaza Strip after Israeli military launched air strikes on the Palestinian enclave in response to the Hamas attack.