The Israeli government formally declared war Sunday and gave the green light for “significant military steps” to retaliate against Hamas for its surprise attack, as the military tried to crush fighters still in southern towns and intensified its bombardment of the Gaza Strip. The toll passed 1,100 dead and thousands wounded on both sides.

More than 24 hours after Hamas launched its unprecedented incursion out of Gaza, Israeli forces were still trying to defeat the last groups of militants holed up in several towns. At least 700 people have reportedly been killed in Israel — a staggering toll on a scale the country has not experienced in decades — and more than 400 have been killed in Gaza as Israeli airstrikes pound the territory.

The declaration of war portended greater fighting ahead, and a major question was whether Israel would launch a ground assault into Gaza, a move that in the past has brought intensified casualties. Meanwhile, in northern Israel, a brief exchange of strikes with Lebanon’s Hezbollah militant group fanned fears that the fighting could expand into a wider regional war.

Authorities were still trying to determine how many civilians and soldiers were seized by Hamas fighters during the mayhem and taken back to Gaza. From videos and witnesses, the captives are known to include women, children and the elderly.

The leader of the Palestinian Islamic Jihad group, Ziad Nakhaleh, said his group, which participated in the attack, is holding more than 30 Israelis, among dozens he said were captive in Gaza. He said they would not be released until all Palestinian prisoners in Israeli jails are freed.

Speaking on ABC’s “This Week,” U.S. Secretary of State Andrew Blinken said as many as 1,000 Hamas fighters were involved in the assault — a high figure that underscored the extent of planning by the militant group ruling Gaza. The gunmen rampaged for hours, gunning down civilians in towns, along highways and at a techno music festival being held in the desert near Gaza. The rescue service Zaka said it removed about 260 bodies from the festival, and the toll was expected to rise as other paramedic teams were working in the area.

Video aired on social media and by Israeli news outlets showed dozens of festival goers running through an open field as gunshots rang out. Many hid in nearby fruit orchards or were gunned down as they fled.

Israel hit more than 800 targets in Gaza so far, its military said, including airstrikes that leveled much of the town of Beit Hanoun in the enclave’s northeast corner.

Warplanes fired tons of explosives on 120 targets, Israeli Rear Adm. Daniel Hagari told reporters, saying Hamas was using the town as a staging ground for attacks. There was no immediate word on casualties, and most of the community’s population of tens of thousands of people likely fled before the bombardment.

“We will continue to attack in this way, with this force, continuously, on all gathering (places) and routes” used by Hamas, Hagari said.