Israeli forces battled holdout Hamas fighters and pounded targets in the Gaza Strip on Sunday as Prime Minister Benjamin Netanyahu warned of a "long and difficult" war ahead against the Palestinian militant group.

The army said tens of thousands of soldiers were deployed to fight militants in southern desert regions near the coastal enclave, to rescue Israeli hostages and then evacuate the entire region within 24 hours.

"We'll reach each and every community till we kill every terrorist in Israel," said military spokesman Daniel Hagari, a day after hundreds of Hamas fighters crossed into Israel in vehicles, boats and even using paragliders.