Thousands of rockets have been fired from the Gaza Strip into Israel in a surprise attack by the Hamas militant group on Saturday morning.
Large plumes of black smoke could be seen rising from a number of Israeli towns.
Images on social media show cars on fire and some buildings damaged, and the Israeli ambulance service reported one woman had been killed and at least 15 other people wounded.
Mobile phone footage also shows Hamas fighters attempting to reach Israel by sea using small boats, and in a highly unusual development, a number of Palestinian fighters appeared to have crossed the border using paragliders, reaching the town of Sderot where gun battles were heard.
Footage from security cameras shows them entering the town in pickup trucks and motorbikes.
Air raid sirens sounded across southern and central Israel, and there were explosions in the cities of Tel Aviv, Ashkelon, Yavne and Kfar Aviv.
Israel’s Magen David Adom rescue agency said a 70-year-old woman was critically injured when a rocket hit a building in southern Israel.
Elsewhere, a 20-year-old man was moderately injured by rocket shrapnel, it said.
In response, the Israeli military says it is striking targets in the Gaza Strip.
The Israeli military said “a number of terrorists have infiltrated into Israeli territory”, with residents along the border area ordered to remain indoors.
Israel said: “The military declares a state of war alert,” in a statement as it instructed civilians to remain near bomb shelters within their homes.
Israel’s defence minister Yoav Gallant authorised the call-up of the country’s reservists, the number of which has not been confirmed but will depend on the military’s needs, a statement from Gallant’s office added.
Mr Gallant is said to be heading to Tel Aviv for an urgent update and Prime Minister Benjamin Netanyahu has convened an emergency meeting of his security cabinet.
The IDF has warned that “the Hamas terror group will pay a very heavy price”.
Hamas said the operation had only just started and it is a response to Israeli violence against Palestinians in the West Bank, Gaza and around Al Aqsa mosque compound in Jerusalem.
The militant group has called on armed groups in Lebanon to join the fighting.
Meanwhile, the Palestinian Islamic Jihad militant group said it has joined Hamas in the attack on Israel.
Mohammad Deif, Hamas military commander, said on Hamas radio that 5,000 rockets had been launched.
“This is the day of the greatest battle to end the last occupation on earth,” he said.
Mr Deif said the strike was the beginning of what he called “Operation Al Aqsa Storm.”
The launches come after weeks of heightened tensions along Israel’s volatile border with Gaza, and heavy fighting in the Israeli-occupied West Bank.(The Sky News)