Benjamin Netanyahu has threatened war with Gaza, amid a fierce exchange of fire that erupted after an Israeli bulldozer was filmed dragging the body of a suspected Palestinian militant, an action rights groups say is a likely war crime.

On Monday, sirens blared as the south of Israel came under an intense barrage of rocketfire, while Israeli aircraft bombed targets in the besieged strip, following an overnight surge in violence prompted in part by the video.

In graphic footage taken by local media and shared on Sunday, Israeli security forces were seen using heavy machinery to carry off a Palestinian they shot dead in southern Gaza.

Palestinian youths are filmed coming under automatic gunfire as they try in vain to retrieve the body themselves.

An armoured bulldozer is then seen repeatedly trying to scoop up the corpse, before driving off with the body dangling from its front blade.

The army said the young man was a Palestinian Islamic Jihad (PIJ) militant who was involved in an earlier incident of planting explosive devices by the partition fence between Gaza and Israel.

Lt Col Jonathan Conricus, spokesperson for the Israeli army, told The Independent that the action was carried out in a way that “minimises exposure to Israeli troops, knowing very well in the past the PIJ have conducted attacks against the army including coming with suicide vests to blow themselves up”.

He defended the decision to remove the body, saying: “It is straightforward. You don’t leave bodies lying around.

“I cannot say there will be an investigation. We have taken notice,” he added.

But Adalah, the Legal Centre for Arab Minority Rights in Israel, sent a letter to Israel’s chief military advocate demanding an immediate criminal investigation, calling the action a “war crime”.

Despoiling a corpse or withholding bodies can be a violation of international law.

“An Israeli military armoured bulldozer was filmed dragging a human body along the ground and repeatedly lifting it up in the air and dropping it down in the mud,” their statement read.

Citing the Geneva conventions and other points of international law, the group added: “Adalah demands the Israeli military immediately open a criminal investigation.”

Yariv Oppenheimer, a former head of Peace Now, an Israeli settlement watchdog, called it “shameful and shocking”, saying the action will “not bring relief to Israeli families and civilians in Gaza”.

Ofer Cassif, a Jewish lawmaker for the mostly Arab Joint List, called it “nauseating bloodthirst”, adding that Israel’s leadership “must put an end to their death celebrations”.

The footage came just days after another graphic video was shared with The Independent showing Israeli security forces in armoured bulldozers storming a Palestinian protest in the occupied West Bank, hurling concrete slabs at people.

Amit Gilutz from Israeli rights group B’tslem, which verified the West Bank footage, called both videos “particularly gruesome”, adding that it reflects “longstanding Israeli policies in the Occupied Territories”.

“Prohibiting demonstrations by using excessive, illegal force, and snatching bodies of Palestinians – all of which was sanctioned, even by the Israeli High Court,” he told The Independent.

Sunday’s bulldozer incident sparked fierce uproar in Gaza, with Hamas, the militant group which rules the strip, calling it an “ugly crime”, while PIJ denounced it as “barbaric”.

PIJ militants then fired over 50 rockets into Israel, according to the Israeli army, which said the indiscriminate fire saw one strike near a nursery. Israeli aircraft struck back with a wave of retaliatory airstrikes on PIJ positions.

People inspect damage at a kindergarten in the southern Israeli city of Sderot, following a rocket barrage from Gaza (AFP) (Photo by JACK GUEZ / AFP)

Just weeks away from a general election, Mr Netanyahu warned the militant groups that if the rocket fire continued Israel would escalate.

“We will shoot you. I’m talking about a war,” he told Israel’s army radio on Monday. “I only go to war as a last option, but we have prepared something you can’t even imagine.”

Lt Col Conricus said that while the Israeli army’s intention was to de-escalate, “if [the PIJ] continues to escalate – they will force us to strike back.”

Israeli officials, meanwhile, defended the bulldozer incident and the decision to “collect” bodies of suspected Palestinian militants.

Israeli Defence minister Naftali Bennett tweeted his support of the army, writing: “Enough of the hypocritical criticism by the left about the ‘inhumanity’ of using a bulldozer to recover the body of a terrorist. That is how it should be done, and that is how we will do it. We will act with force against terrorists.”

He also reiterated remarks made earlier where he said he had issued a directive “to collect bodies of terrorists, and if possible, living members of Hamas” as a method of putting pressure on the group to release the bodies of Israeli soldiers it is withholding.

Hamas continues to hold the remains of Lt Hadar Goldin and Staff Sgt Oron Shaul, who were killed during the 2014 war between Israel and Gaza – an action that violates International law.

Smoke trails from a rocket fired by Palestinian militants over the Gaza Strip (AFP/Getty) (Photo by MAHMUD HAMS/AFP via Getty Images)

Israel and Hamas have engaged in three wars between 2008 and 2014 and several intense rounds of violence over the last year and a half.

In November, Israel and the Islamic Jihad group engaged in a heavy round of fighting after the Israeli military killed a top Islamic Jihad commander.

Since then, Israel and Gaza’s more powerful Hamas group have been working through Egyptian mediators to cement an informal ceasefire. But Islamic Jihad has continued to try to carry out attacks.