Muslims celebrate after the morning Eid Al Fitr outside the Dome of the Rock mosque in the Al Aqsa mosques compound in Old Jerusalem on Thursday. AFP

The latest outburst of Mideast violence has reached deeper into Israel than any since the 2000 Palestinian intifada, or uprising, with Arab and Jewish mobs rampaging through the streets, savagely beating people and torching cars.

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The last three wars between Israel and Gaza's militant Hamas rulers were largely confined to the impoverished and blockaded Palestinian territory and Israeli communities on the frontier. But this round of fighting — which like the intifada, began in Jerusalem — seems to be rippling far and wide, tearing apart the country at its seams.

A banner hangs in front of the Dome of the Rock mosque in the Al Aqsa mosque compound in Old Jerusalem during the morning Eid Al Fitr prayer on Thursday. AFP

Eid Al Fitr, the holiday marking the end of a month of daylong fasting, is usually a festive time when families shop for new clothes and gather for large feasts.

But in Gaza residents are bracing for more devastation as militants fire one barrage of rockets after another and Israel carries out waves of bone-rattling airstrikes, sending plumes of smoke rising into the air. Since the rockets began Monday, Israel has toppled two high-rise apartment buildings housing Hamas facilities after warning civilians to evacuate.

Hamas urged the faithful to mark communal Eid prayers inside their homes or the nearest mosques instead of out in the open, as is traditional.

Hassan Abu Shaaban tried to lighten the mood by passing out candy to passers-by after prayers, but acknowledged "there is there is no atmosphere for Eid at all.”

"It is all airstrikes, destruction and devastation,” he said. "May God help everyone.”

A picture taken with a drone shows the ruins of buildings, which were destroyed in Israeli airstrikes, in Gaza. Reuters

Gaza militants continued to bombard Israel with nonstop rocket fire throughout the day and into early on Thursday. The attacks brought life to a standstill in southern communities near Gaza, but also reached as far north as the Tel Aviv area, about 70 kilometres (45 miles) to the north, for a second straight day.

The Israeli military says more than 1,600 rockets have been fired since Monday, with 400 falling short and landing inside Gaza. Israel's missile defenses have intercepted 90% of the rockets. Israeli airstrikes have struck around 600 targets inside Gaza, the military said.

Gaza’s Health Ministry said the death toll rose to 69 Palestinians, including 16 children and six women. Islamic Jihad confirmed the deaths of seven militants, while Hamas acknowledged that a top commander and several other members were killed. Israel says the number of militants killed is much higher than Hamas has acknowledged.

A total of seven people have been killed in Israel, including four people who died on Wednesday. Among them were a soldier killed by an anti-tank missile and a 6-year-old child hit in a rocket attack.

Associated Press