Israeli troops massed on the Gaza border last night, poised for a possible ground invasion as Israel launched a major military operation it said was designed “to severely impair the command and control chain of the Hamas leadership, as well as its terrorist infrastructure.”

Military sources told The Independent that a ground invasion was "a distinct possibility". The army has deployed extra infantry units near the Gaza border, halted major exercises, cancelled soldiers' leave and mobilised some reserve forces.

The opening salvo of Operation Pillar of Cloud was the pinpoint assassination by missile of the Hamas military commander, Ahmed al-Jabari, as he drove through Gaza City, followed by aerial attacks against targets throughout the Hamas-controlled enclave. At least 10 Palestinians, including civilians, were reported dead.

Gaza residents ran for cover as Israeli aircraft pounded targets across the Gaza Strip. It was the most extensive assault since Israel's ill-starred ground invasion ended in January 2009.

Eyewitnesses reported widespread panic as darkness fell, with people rushing to stock up with food. Israel struck 25 separate targets, including Hamas storage sites, some of them hidden in residential buildings. Israel said it bombed stockpiles of long-range rockets – including the Iranian Fajr-5, with a range of more than 25 miles, used to devastating effect by Hezbollah in the 2006 Israel-Lebanon War. Hamas warned that Israel "had opened the gates of hell upon themselves."

The Defence Minister, Ehud Barak, said last night that Operation Pillar of Defence had "taken out" most of Hamas's rockets and other infrastructure.

"Israel is not interested in engaging in war, but Hamas's provocation in the past days has made it imperative that we act sharply and decisively," he said. "The operation's goals are to deal a harsh blow to the rocket firing capabilities... It won't happen at once, but we will achieve the goals of this operation. We are at the start of the events and not at the end... In the long run, I believe this will lead to deterrence and the restoration of quiet in the south."

The IDF Spokesman, Brigadier- General Yoav Mordechai said: "Were I a Hamas operative, I would now opt to shelter underground."

Several days of tough talk by Israeli leaders and Egyptian mediation seemed to have ended a massive Palestinian rocket barrage that confined more than a million Israelis to their homes for more than three days.

Then, shortly after 3.30pm yesterday, came the Israeli strike at the heart of the shadowy Hamas armed wing.

Mr Jabari, 52, was commander of the Hamas military wing. He made a rare public appearance just over a year ago, escorting Israeli soldier Gilad Shalit – whose kidnapping he planned – to freedom, but otherwise lived like a hunted man at the top of Israel's wanted list.

He was driving with his bodyguard in Gaza City when the vehicle was torn apart by a single Israeli missile. Both men appear to have died instantly.

Hamas leaders rushed to identify Al-Jabari's body and announce his death. They threatened swift retaliation.

"The Israelis thought they could break Hamas resistance by killing al-Jabari. They are wrong. The Palestinian resistance is still strong. We will co-ordinate our reply to this crime committed by the Israelis," said Hamas spokesman Sami Abu Zuhri. "Two days ago there was a ceasefire agreement prepared through Egyptian mediation. The Israelis did not commit to it and now they will pay the price."

Palestinian officials from the rival Fatah party also denounced the killing. "We condemn in the strongest terms this new Israeli assassination which aims to initiate a bloody escalation," said Palestinian negotiator Saeb Erekat. "This exposes that Israel has an agenda for war but not for peace."

In Israel, police and home-front command officers were placed on full alert as rockets began falling. Israeli vice-premier Silvan Shalom hailed Mr Jabari's killing as a fitting end for a man who had masterminded some of Hamas's bloodiest attacks against Israel. "These guys like sending other people to martyrdom, but they don't like martyrdom for themselves," Mr Shalom said.

Israeli leaders may have satisfied recent calls for a tough response to the recent violence, but they are likely to come under diplomatic fire for launching an offensive when an Egyptian-brokered ceasefire seemed to be holding after 24 hours of relative calm. The Egyptian president Mohamed Morsi recalled his ambassador to Israel in protest, while the Arab League said it would meet to discuss the situation on Sunday.

"I am responsible for us choosing the right time to exact the heaviest price, and so be it," the Prime Minister, Benjamin Netanyahu, told residents of Beersheba, which had been targeted by Gaza rockets, just before the assassination. "Whoever thinks they can damage the daily lives of residents of the south, and that they won't pay a heavy price for this – they are mistaken."

Israel's last ground invasion of Gaza killed more than 1,000 Palestinians, including many children and other civilians, and destroyed hundreds of homes. Even though Hamas has allowed the launching of more than 750 rockets into Israel this year alone, Israeli leaders already facing the prospect of diplomatic isolation over a Palestinian bid for UN recognition on 29 November, will be hard-pressed to maintain international support for a repeat performance.

Profile - Ahmed Al-Jabari: Commander was blamed for rocket strikes

Ahmed al-Jabari was one of Hamas's leading figures and head of its military wing.

His death yesterday was the first of a senior Hamas figure at the hands of Israel since Operation Cast Lead in 2008, when Israel launched a full-scale attack on the Gaza Strip.

He had nonetheless been at the top of the Israel Defence Forces' target list for some time. The Israelis held him responsible for the Qassam rocket strikes that have almost continually hit southern Israel – attacks that have escalated in recent days.

It is believed that Mr Jabari had responsibility for overseeing the imprisonment of Gilad Shalit, the Israeli soldier captured by Hamas in 2006 and held until last year. The deal saw hundreds of Palestinians released from Israeli prisons.

Within hours of Mr Jabari's death yesterday, Israel's internal intelligence agency, Shin Bet, said that it had killed him.