At least 198 people have been killed in Palestine’s Gaza, while 40 lost their lives in Israel after more than 5,000 rockets were launched by the militant group Hamas in a surprise attack, media reports said.

Israel has declared war on Hamas and initiated airstrikes in response to this fierce attack.

This extensive rocket barrage from Gaza, the largest attack by Hamas on Israel in recent years, started early on Saturday during the Jewish Sabbath and the festival of Simchat Torah.

As alarms blared across Israel, the Israeli Defense Forces (IDF) announced that "terrorists" had entered Israeli territory at multiple locations, BBC reported.

Residents of towns near Gaza have been reaching out to Israeli news outlets, reporting that they are confined to their homes as militants have entered their communities, the report said.

In Sderot, a town situated merely 1.6km (1 mile) from Gaza, online footage seems to show a group of heavily armed Palestinian militants in black attire driving through Sderot in a pickup truck. In one video, these same militants appear to be engaging in gunfire with Israeli forces on the streets, according to BBC.

Prime Minister Benjamin Netanyahu declared that Israel is in a state of war, emphasizing that Hamas will face unparalleled consequences. Citizens of Israel, we are at war. This is not an operation, not an escalation - this is war. And we will win. Hamas will pay an unprecedented price," he said in a video message.

Defence Minister Yoav Gallant said Hamas made a "grave mistake" in launching a war against Israel. "Hamas has made a grave mistake this morning and launched a war against the State of Israel. IDF troops (Israeli army) are fighting against the enemy at every location," Gallant said in a statement.

More than 5,000 rockets were launched towards Israel, with blaring sirens resonating throughout the country on this celebratory holiday morning.

The nation's defence forces also claimed an incursion by Hamas militants, whom they label as terrorists.

Visuals from Israel revealed the use of paragliders in the assault, along with reports of firing at passing cars on the roads.

The Indian embassy in Israel has advised its citizens residing there to stay vigilant and adhere to safety guidelines recommended by local authorities.

"Please exercise caution, avid unnecessary movement and stay close to safety shelters," it said in an advisory.