By Dan Williams, Nidal al-Mughrabi and Maayan Lubell
JERUSALEM/GAZA/KFER AZA (Reuters) -Israeli air strikes hammered Gaza on Tuesday, razing entire districts and filling morgues with dead Palestinians as Israel took revenge for the Hamas assaults that have triggered some of the worst blood-letting in 75 years of conflict.
Across the barrier wall enclosing the coastal enclave, Israeli soldiers collected the last of Israel's dead four days after Hamas gunmen rampaged through towns, killing hundreds of people in the deadliest Palestinian militant attack in Israel's history.
Hamas militants holding Israeli soldiers and civilians hostage had threatened to execute a captive for each home in Gaza hit, but as night fell on Tuesday there was no indication they had done so.
But Israel's defence minister said its forces were gearing up for a ground offensive.
And on Israel's northern border, a salvo of rockets was fired from southern Lebanon towards Israel, prompting Israeli shelling in return, three security sources said. The exchange signalled the prospect that the violence could lead to a wider war.
Israel's embassy in Washington said the death toll from the weekend Hamas attacks had surpassed 1,000. The victims were overwhelmingly civilians, gunned down in homes, on streets or at an outdoor dance party. Scores of Israelis and some foreigners were captured and taken to Gaza as hostages, some paraded through the streets.
Gaza's health ministry said Israel's retaliatory air strikes had killed at least 830 people and wounded 4,250 up to Tuesday. The strikes intensified on Tuesday night, shaking the ground and sending columns of smoke and flames into the sky.
The United Nations said more than 180,000 Gazans had been made homeless, many huddling on streets or in schools.
Israeli Defence Minister Yoav Gallant, speaking to soldiers near the Gaza fence, said: "Hamas wanted a change and it will get one. What was in Gaza will no longer be."
"We started the offensive from the air, later on we will also come from the ground. We've been controlling the area since Day 2 and we are on the offensive. It will only intensify."
At the morgue in Gaza's Khan Younis hospital, bodies were laid on the ground on stretchers with names written on their bellies. Medics called for relatives to pick up bodies quickly because there was no more space for the dead.
A municipal building was hit while being used as an emergency shelter. Survivors there spoke of many dead.
"No place is safe in Gaza, as you see they hit everywhere,"
said Ala Abu Tair, 35, who had sought shelter there with his family after fleeing Abassan Al-Kabira near the border.
Radwan Abu al-Kass, a boxing instructor and father of three, said he evacuated his five-storey building in the Al Rimal district when a missile hit the building. It was destroyed by a bigger strike after he got out.
"The whole district was just erased," he said.
Two members of Hamas' political office, Jawad Abu Shammala and Zakaria Abu Maamar, were killed in an air strike in Khan Younis, a Hamas official said.
They were the first senior Hamas members killed since Israel began pounding the enclave. Israel said Abu Shammala had led a number of operations targeting Israeli civilians.
The Palestinian Foreign Ministry said Israeli strikes had since Saturday destroyed more than 22,600 residential units and 10 health facilities and damaged 48 schools.
U.N. High Commissioner for Human Rights Volker Turk, who denounced the Hamas attacks, said civilians had been harmed in Israeli strikes on tower blocks, schools and U.N. buildings.
"International humanitarian law is clear: the obligation to take constant care to spare the civilian population and civilian objects remains applicable throughout the attacks," he said.
TRAIL OF BLOOD
In Israel, there has still been no complete official count of the dead and missing from Saturday's attacks. In the southern town of Be'eri, where more than 100 bodies have been retrieved, volunteers in yellow vests and face masks carried the dead out of homes on stretchers.
A long, wide trail of blood wound along the floor of a house where bodies had been dragged out by militants into the street from a bloodsoaked kitchen strewn with overturned furniture.
"The thing I want the most is to wake up from this nightmare," said Elad Hakim, a survivor from the outdoor music festival where Hamas had killed 260 partygoers at dawn.
Amid the burned-out houses of the Kfar Aza kibbutz, bodies of Israeli residents and Hamas militants lay on the ground beside scattered furniture and torched cars. Israeli soldiers went from house to house to take away the dead. The stench of corpses hung heavy in the air.
"You see the babies, the mothers, the fathers, in their bedrooms, in their protection rooms and how the terrorist kills them. It's not a war, it's not a battlefield. It's a massacre," Israeli Major General Itai Veruv said at the scene.
"It's something we used to imagine from our grandfathers, grandmothers in the pogrom in Europe and other places."
Soldiers were still securing the paths of the kibbutz as bursts of gunfire and explosions could be heard in the distance. Jets roared above and sirens warned of incoming rockets intercepted overhead.
Israel's next move could be a ground offensive into Gaza, territory it left in 2005 after 38 years of occupation, and has kept under blockade since Hamas seized power there in 2007. The siege it announced on Monday would keep out even food and fuel.
Israeli leaders now must decide whether to constrain their retaliation to safeguard the hostages now hidden in Gaza. Hamas spokesperson Abu Ubaida issued a threat on Monday that one Israeli captive would be killed for every Israeli bombing of a civilian house without warning.
(Reporting by Dan Williams, Emily Rose, Henriette Chacar and Ari Rabinovitch in Jerusalem, Nidal al-Mughrabi in Gaza and Maayan Lubell in Kfar AzaWriting by Peter Graff and Angus MacSwanEditing by Alexander Smith, Andrew Cawthorne, Mark Heinrich and Nick Macfie)