Israel launched deadly air strikes on Gaza on Monday in response to a barrage of rockets fired by Hamas and other Palestinian fighters, amid spiralling violence sparked by unrest at Jerusalem's Al Aqsa Mosque compound.

At least 20 people were killed, including nine children and a senior Hamas commander, and 65 others wounded, Gaza authorities said.

Israeli Prime Minister Benjamin Netanyahu warned that Hamas had crossed a "red line" by directing missiles towards Jerusalem and that Israel would "respond with force".

Israeli forces said 150 rockets had been launched from Gaza, dozens of which were intercepted by the Iron Dome Aerial Defence System, with no casualties reported.

Hamas sources confirmed to AFP that one of their commanders, Mohammed Fayyad, had been killed.

Tensions in Jerusalem have flared since Israeli  forces clashed with Palestinian worshippers on the last Friday of the Muslim holy fasting month of Ramadan in the city's worst disturbances since 2017.

Nightly unrest since then at Al Aqsa compound has left hundreds of Palestinians wounded, drawing international calls for de-escalation and sharp rebukes from across the Muslim world.

Diplomatic sources told AFP that Egypt and Qatar, who have mediated past Israeli-Hamas conflicts, were attempting to calm tensions

Adding to the sense of chaos, a huge fire engulfed trees in the compound that houses the mosque, Islam’s third holiest site, as hundreds of Israelis watched from the Western Wall esplanade below.

Hamas, which controls the Gaza Strip, earlier on Monday warned Israel to withdraw all its forces from the mosque compound and the East Jerusalem district of Sheikh Jarrah, where looming evictions of Palestinian families have fuelled angry protests.

Sirens wailed across Jerusalem just after the 15:00 GMT deadline set by Hamas as people in Jerusalem, including lawmakers in the Knesset legislature, fled to bunkers for the first time since a 2014 Gaza conflict.

A spokesman for Hamas’ armed wing the Qassam Brigades said the rocket attacks were in response to Israeli actions in Sheikh Jarrah and around the Al Aqsa Mosque.

"This is a message that the enemy must understand well: If you respond we will respond, and if you escalate we will escalate.”

The United States said it "condemns in the strongest terms the barrage of rocket attacks fired into Israel in recent hours. This is an unacceptable escalation”.

‘Escalating aggression’ 

Fears of further chaos in the Old City had temporarily eased when Israeli organisers of a march to celebrate Israeli 1967 capture of East Jerusalem cancelled the event.

But then came the Hamas warning, followed by the rockets, which also forced the evacuation of the Western Wall and other sites.

Fighters in Gaza have recently also deployed incendiary balloons that have sparked dozens of fires in Israeli territory.

On Monday evening, as during the previous nights since Friday, Palestinians hurled rocks at Israeli officers in riot gear who fired rubber bullets, stun grenades and tear gas.

That came after morning clashes which left the ground littered with rocks, stun grenade fragments and other debris as loud booms and angry screams echoed from the ancient stone walls.

There were dozens of newly wounded demonstrators. The Palestinian Red Crescent had earlier put the toll from Monday’s clashes at more than 334 wounded, including more than 200 who were hospitalised, five of them in critical condition.

The violence since Friday has been fuelled by a long-running bid by Jewish settlers to evict several Palestinian families from their nearby Sheikh Jarrah neighbourhood.

A supreme court hearing on a Palestinian appeal in the case originally set for Monday was pushed back by the justice ministry due to the tensions.

Palestinian President Mahmoud Abbas condemned what he called Israel’s "barbaric aggression”