Hamas has declared open war against Israel after its founder and spiritual leader, Sheikh Ahmed Yassin, was killed in an Israeli air strike in the Gaza Strip.
Sheikh Yassin was leaving early morning prayers in Gaza City when his car was hit by at least three Israeli missiles.
At least seven other people were killed in the strike, including five of Sheikh Yassin's bodyguards. Some reports also said his son died in the attack.
As news of Sheikh Yassin's death spread, Hamas militants have vowed to "bring death to every house" in Israel.
"Sheikh Ahmed Yassin rest in peace," Hamas militants shouted through loudspeakers in the streets of Gaza City. "They will never enjoy rest. We will send death to every house, every city, every street in Israel."
Senior Hamas leader leader Abdul Aziz al-Rantissi says war with Israel is "open".
"They know it's opened, there will be no revenge, it's an open war," Mr Rantissi said.
Gates of hell
Hamas said in a statement that the killing has opened the gates of hell.
Thousands of Palestinians, many in tears, poured into the streets as gunmen fired into the air, after Gaza City's mosques announced the death in unison five minutes after the missile strike.
"The sheikh is dead. The sheikh is dead," sobbed gunmen and Hamas militants who gathered at the scene.
The Al-Aqsa Martyrs Brigades, a militant group in Palestinian president Yasser Arafat's Fatah, has said it too is declaring war on Israelis.
"War, war, war on the sons of Zion. An eye for an eye. There will be a response within hours, God willing," the group said in a statement.
Israel had warned that no leader of a Palestinian militant group would be immune from assassination and the Israeli army has confirmed it killed Sheikh Yassin, saying he was directly responsible for dozens of terrorist attacks.
An army statement said: "In an operation by security forces this morning in the northern Gaza Strip, Sheikh Ahmed Yassin, leader of the Hamas terrorist group and personally responsible for dozens of terrorist attacks and the deaths of Israelis, foreigners and security personnel, was killed in an air strike on his car."
Israel has sealed off the West Bank and Gaza Strip, barring Palestinians from entering the Jewish state in a bid to prevent revenge attacks.
