The Islamist movement Hamas launched the biggest attack on Israel in years on Saturday in a surprise assault that combined gunmen crossing the border with a heavy barrage of rockets from the Gaza Strip.

As warning sirens sounded across southern and central Israel, including in Jerusalem, Israel's military said it was on a war footing as Prime Minister Benjamin Netanyahu called an emergency meeting of security officials.

Saturday's incident was the most serious since Israel and Hamas fought a 10-day war in 2021, with Israeli media reporting gunbattles between bands of Palestinian fighters and security forces in towns in southern Israel.

Hamas military commander Mohammad Deif announced the start of the operation in a broadcast on Hamas media, calling on Palestinians everywhere to fight.

"This is the day of the greatest battle to end the last occupation on earth," he said, adding that 5,000 rockets had been launched.

One Israeli woman was killed, according to emergency services, as ambulance crews were deployed in areas around the Gaza Strip.

The Israeli military said its forces were operating inside Gaza but gave no details.

"A number of terrorists have infiltrated into Israeli territory from the Gaza Strip," the military said in a statement, adding that residents in the area surrounding the Gaza Strip had been told to stay in their homes.

Israeli media reported that gunmen had opened fire on passers-by in the town of Sderot, in southern Israel, and footage circulating on social media appeared to show clashes in city streets as well as gunmen in jeeps roaming the countryside.

Palestinian media also reported that a number of Israelis had been taken captive by fighters and Hamas media circulated video footage apparently showing a destroyed Israeli tank.

Prime Minister Benjamin Netanyahu's office said he would meet top security officials in the coming hours and Defence Minister Yoav Gallant authorised the call-up of reservists.

In Gaza the roar of rocket launches could be heard and residents reported armed clashes along the separation fence with Israel, near the southern town of Khan Younis, and said they had seen significant movement of armed fighters.

Israel's ambulance service said teams had been dispatched to areas in southern Israel near Gaza and residents were warned to stay inside.

A group representing military reservists who had planned to refuse to attend training over their objections to the government's plans to overhaul the judiciary called on reservists to report for duty.