Palestinian militant group Hamas, which dragged off about 150 hostages in its surprise weekend assault on southern Israel, threatened on Monday to kill them if Israeli air strikes continue "targeting" Gaza residents without warning.
The threat came after Israel imposed a total siege on the Gaza Strip, cutting off the water supply which sparked UN fears of an increasingly dire humanitarian situation.
Tensions also escalated on Israel's northern front at the Lebanese border, where Hezbollah militants and Israeli forces exchanged fire for a second day.
Israel has been left reeling from the Hamas Islamist group's unprecedented ground, air and sea attacks, likening them to 9/11.
The death toll rose to 800 in Israel which launched a withering barrage of strikes on targets in Gaza, raising the death toll there to 687.
Fireballs repeatedly lit up the darkness of Gaza City Monday night as explosions sounded and sirens wailed.
Hamas -- which sent about 1,000 fighters into Israeli towns on Saturday, spraying gunfire at civilians -- claimed on Monday that Israeli air strikes had killed four of the hostages.
It later said it could start killing them itself.
"Every targeting of our people without warning will be met with the execution of one of the civilian hostages," the Ezzedine al-Qassam Brigades, the armed wing of Hamas, said in a statement.
In a televised speech Monday night, Israeli Prime Minister Benjamin Netanyahu compared Hamas to the Islamic State group, also known as ISIS, and said Israel planned to carry out a "massive" assault against Hamas with "unprecedented force".
"Hamas terrorists bound, burned and executed children. They are savages. Hamas is ISIS," Netanyahu said.