Qatar is mediating an urgent prisoner swap between Hamas and Israel, a Hamas source said.

"With U.S. support, Qatar is seeking to accomplish an urgent agreement that would lead to the release of Israeli women captured by Hamas (during Operation Al-Aqsa Flood) in exchange for Palestinian female prisoners in Israeli prisons," the source, who wished to remain anonymous, told Chinese news agency Xinhua.

The evacuation warning came shortly after dark. The Israeli military fired the shot just a short distance from Nasser Abu Quta's home in the southern Gaza Strip, a precautionary measure meant to allow people to evacuate before airstrikes.

Abu Quta, 57, thought he and his extended family would be safe some hundred meters (yards) away from the house that was alerted to the pending strike. He huddled with his relatives on the ground floor of his four-story building, bracing for an impact in the area.

Moscow and the Arab League will work to "stop the bloodshed" in Israel and Gaza, Russian foreign minister Sergei Lavrov said Monday as he met the group's chief Ahmed Aboul Gheit in Russia.

"I am sure that Russia and the Arab League (will cooperate) above all else to stop the bloodshed," Lavrov said. Aboul Gheit said the Arab League "condemns violence, but from all sides."

Israeli Defense Minister Yoav Gallant Monday ordered a "complete siege" on the Gaza Strip as the military pounded the Palestinian enclave with air strikes.

"We are putting a complete siege on Gaza... No electricity, no food, no water, no gas -- it's all closed," Gallant said in a video statement, referring to the crowded enclave home to 2.3 people.

Hamas gunmen killed around 250 people who attended an outdoor music festival in an Israeli community near Gaza at the weekend, a volunteer who helped collect the bodies said on Monday.

"In the area where the party took place, and at the party itself" it could be estimated that "there were 200-250 bodies," said Moti Bukjin, a spokesman for the humanitarian NGO Zaka, based on the number of trucks that ferried away the corpses.

Iranian security officials helped plan Hamas’ Saturday surprise attack on Israel and gave the green light for the assault at a meeting in Beirut last Monday, the Wall Street Journal quoted “senior Hamas and Hezbollah members” as saying.

Anti-rocket sirens followed by the sound of blasts were heard Monday in Jerusalem and Tel Aviv, as Israel's army battled Hamas militants in southern towns for the third consecutive day.

Palestinian groups said they have fired a new barrage of missiles at Jerusalem and Tel Aviv, saying it comes in response to attacks on civilians in Gaza.

With its surprise attack against Israel, Hamas has violently shifted the world's eyes back to the Palestinians and dealt a severe blow to momentum to secure a landmark U.S.-brokered deal between Israel and Saudi Arabia.

The Iranian-backed Islamist militants who run the impoverished, blockaded Gaza Strip on Saturday fired thousands of rockets and infiltrated forces into Israel, 50 years after Arab states' assault on Israel during the Jewish holy day of Yom Kippur.

Israel's army declared on Monday that its forces were in "control of communities" in its southern territory near Gaza, two days after Hamas militants launched a surprise attack there.

"We are in full control of the communities," military spokesman Daniel Hagari told journalists, adding however that there still might be "terrorists" in the area.

The surprise assault by Hamas against Israel was a meticulously planned offensive that the Palestinian militant group is capable of keeping up, with a risk of even greater escalation, analysts say.

Hamas can count on a deep arsenal of rockets to use against Israel but key questions include how much support it has received from Iran, which has expressed its backing for the offensive, and whether Hezbollah will enter the fray.