Netanyahu is about to address his nation. Were going to go there live once he begins. The situation in israel is changing by the hour. Here is a look at the gaza skyline right now. You can see smoke even though its very dark, and flames out there in the distance, from near continuous israeli strikes. The idf says thousands of targets have already been hit. Prime minister Benjamin Netanyahu has promised that this is only the start with more than 700 israelis dead, he says what is coming next will be painful. But what exactly can come next . There are those within the Israeli Government, including the former Defense Minister who told the bbc that the only choice is to eliminate hamas period, and there are others who say the only way to do that is to flatten gaza. But how do you do that without incurring major civilian losses. There are roughly 2 million civilians trapped in gaza, blockaded by both israel and egypt. The Israeli Government has told them to get out. Where exactly can they go . The Palestinian Health authority is already reporting at least 560 have been killed in gaza. There is also the issue of israeli hostages. By now, you have seen the truly horrific videos of families, children, young people, and the elderly, kidnapped. Some at a dance party. Otherwise inside their own homes, and taken prisoner back to gaza. Historically, israel has gone to incredible lengths to get their own back, trading 1,027 prisoners for one soldier in 2011. Hamas says it is 130 israeli captives, and a moment ago, a hamas spokesperson said they will begin executing an israeli captive in return for any new israeli bombing of Civilian Houses Inside Gaza without prewarning. In israel, there are about 4,500 Palestinian Security prisoners, according to bet sa lem, an israeli human rights group. Do they get traded . Do the old rules even apply anymore . And adding to all of this, the complicated fact that the Israeli Government was caught completely unaware and is being criticized for putting too much focus on the west bank and failing to watch the gaza strip. Egypt says it warned netanyahu. Were going to get insight on that. First let us get on the ground to the reporters in israel. Joining me from ashkelon is raf sanchez. Tell us more about the threat from hamas. Reporter we can hear the rockets booming behind us, seeing the night sky lit up by these Iron Dome Intercepter missiles. As you mentioned, we are waiting to hear, perhaps, any minute now from israeli Prime MinisterBenjamin Netanyahu. There are two Big Questions in israel, questions that may not be answered when he addresses his country shortly. One of them is israel preparing to move ahead with the Ground Offensive into gaza, an all out invasion of the densely populated gaza strip. I can tell you from what were seeing on the ground, all indications, we are heading for a Ground Offensive and potentially very very soon. We spent most of the day on one of the main north South Highways in israel. And every few minutes, katy, Heavy Trailer Trucks Rumbling Past with tanks, with armored personnel carriers, with artillery loaded on the back. All of it surging south to the gaza border. Israel has called out 300,000 reservists, a mobilization we have not seen in generations. That is 300,000 people out of the work force, and into uniform. It is only a decision that you take if you need the manpower because it is potentially devastating to the israeli economy to have that many people not at work. The other big question which we may hear from Prime MinisterBenjamin Netanyahu about is whether israel is going to form an emergency unity government in the face of this unprecedented Surprise Attack. You and i have talked many times in recently months about the deep, deep divisions in israel over Prime Minister netanyahus plans to weaken the supreme court, divisions that have brought israeli protesters into the streets in hundreds of thousands for months now. Tonight there is a real possibility that israels Opposition Parties will enter into an Emergency Government alongside Prime Minister netanyahu and his right wing coalition. We have heard Opposition Leaders saying that they are open to that, that they feel that this is a moment of crisis, and that it is their patriotic duty to join a government. Israels Defense Minister also today imposing what he called a state of siege on gaza. He says no food, no fuel, and no electricity will go into the gaza strip. He says that israel is fighting what he calls Human Animals and they will fight according to those terms. As you said, katy, no one knows at this point whether the old rules apply. Human Rights Groups are saying this is collective punishment. There are 2 million civilians inside of gaza. And as much as israel ma want to put pressure on hamas to choke off gaza is to choke off the 2 million civilians under israeli air strikes. Israel goes to Great Lengths to avoid civilian casualties inside gaza. I met palestinians who have been called by israeli officers who made sure the buildings are evacuated before they strike them. Its just simply a fact that if you drop heavy explosives in the crowded streets of gaza city or in a refugee camp as you are inevitably going to kill civilians, the death toll stands at more than 700 inside israel, more than 500 inside gaza. I think it stands to mention that the blockade of gaza is on two sides, israel and egypt, and the question is does egypt do anything about the civilians that are going to be caught up in what will be perhaps the ugliest retaliation we have seen from israel on the gaza strip. Let me talk to you about the hostages, a complicating factor are these 130 israeli civilians that hamas says its holding. Now with this execution threat, as youve reported multiple times in the past israel has gone to Great Lengths to get their people out, trading a thousand plus prisoners for one israeli soldier. After five years. There are 4,500 Israeli Security prisoners right now. Is there any talk about what might be done with them . Reporter well, katy, we are already starting to hear murmurings of negotiations in an early stage, via a third party. We expect that to be qatar, the wealthy persian gulf state that so often acts as an intermediary. It sound like these negotiations are nowhere near reaching any kind of deal. And israels government really facing kind of an agonizing choice here, can they be seen to negotiate with the very same people who launched this unprecedented Surprise Attack, who are responsible for the deaths of so many civilians. Could the israeli population tolerate the idea that hamas might be as it were rewarded for the violence that its inflicted. You can hear those booms overhead, katy. I suspect thats probably one of the Iron Dome Intercepters. There are no sirens going off, so well continue to talk here. The other option, katy, is to try to mount some kind of hostage rescue. The world might remember the near Miraculous IsraeliHostage Rescue Mission in uganda back in 1976. That was seen as just an absolute triumph for this country. No one thinks that Something Like that is going to be possible in this situation. Gaza has an underground city of tunnels beneath it, and you can bet that the hostages are being held in those tunnels, that they are spread out, that hamas is doing absolutely everything it can to make it difficult for a rescue to happen. Israels military would have to fight its way into gaza, fight its way into those tunnels, and somehow get those people out alive before hamas carries out its threats execute them. That would be just on unspeakably complex rescue operation. It is not one that we are hearing a lot of optimism about right now. But these are the plans that are being drawn out by israels political leaders right now, and you can bet thats what theyre studying, what theyre deciding on. And when you talk about the civilians dead in israel, 700, a lot of them slaughtered at close range. Raf sanchez, thank you very much. Joining me from beirut is nbc news Foreign Correspondent matt bradley. The other side of this is what happens if israel does end up incurring on to gaza territory, into the gaza strip, what does hezbollah do, they have attacked a contested region in the north in the golan heights, whats the word there . We have confirmation that two hezbollah fighters have been killed. Hezbollah themselves have said this, my extraordinarily brave colleague, raf sanchez, he was mentioning the Big Questions around this conflict. This is another one i could add, whether or not this conflict becomes internationalized, and were getting an answer. Were starting to see a lot of fighting, not as much, nearly as much as what were seeing in israel and the gaza strip. Quite a bit of an escalation on the border, the blue line between lebanon and israel, we could see hezbollah become part of the fighting and that could bring in another nation, another fighting group. Hezbollah is backed by iran, into this already blistering conflict, and that would be bad news not just for israel and the gazans, and the palestinians but the entire region if hezbollah were to throw its weight into the fight as welg. And were seeing that escalation happening in the last few hours, katy. And hezbollah has found themselves in a draw with israel a few years back, they called it a win. Really more like a draw. Theyre the ones that have done some of the most successful fighting against israel, is my best way of putting it . Reporter yeah, i mean, theyve done some of the most successful fighting. That was back in 2006. That was a essentially a large war. We can call it that. It wasnt a border skirmish, it was a mass conflict, and lots of people died, including civilians here in lebanon, the issue is hezbollah is backed by iran. Theres reporting that iran gave the green light for the operation. I spoke with a hamas official just a little while ago here in beirut. Hes a major spokesperson and kind of an international representative. I asked him directly whether or not iran was involved, and he, like Israeli Intelligence and a lot of american intelligence, said that iran was just as surprised as everybody else. Heres what he told me. Translator this was a Palestinian Operation 100 . Hamas determined the zero hour and did not inform anyone. Because of that, israel was surprised. America was surprised. Arab security apparatuses were shocked, and palestinians did not know that hamas was going to carry out a large operation on october 7th. Reporter now, its within hamass interest to say it, they are the sole executors of this operation that they consider to be hugely successful and that a lot of their supporters consider to be hugely successful, but the sophistication of it, the weapons that were brought to bear, the training that clearly was involved in all of this, it does look a lot like iran might have been part of it. But still, we dont have much confirmation beyond that Wall Street Journal article that quoted officials from hamas, and hezbollah. They were unnamed, but they said that operation, the green light happened in several meetings right here in beirut as recently as the monday before the attack. The american authorities are saying they cant confirm that as of now. Matt bradley, thank you very much. And of the more than 700 people in killed in israel, 260 of the victims were found at the site of a Music Festival where young people had spent the night dancing. Here is new video from one concert goer who was forced to dodge the gunfire. Joining me now from telaviv is msnbc anchor, and chief correspondent, ali velshi. Its good to have you. 260 people slaughtered at this festival. What more are we learning about what happened, and how others managed to escape . Reporter and first, katy, i want to thank you for taking over the show on sunday while i was able to travel here. Those people were killed. Others escaped by utilizing, by running, by hiding. Yet others were taken and captured by hamas and maybe part of that group of hostages that hamas is holding and may be negotiating for their release. I actually spoke to Somebody Just a couple of hours ago whose daughter was supposed to go to that party and decided not to fairly late in the day. She had, in fact, not only planned to go but was looking for a bottle of wine to take to the event. Its a common occurrence in israel. Its sort of a let off steam kind of thing. And it is the central focus of those 700 people you say were killed, 260 were killed at that event. Those are different from the Missile Attacks that we continue to see. Since then, by the way, the retaliation has continued. Around this time every night, we start to hear rockets coming in from gaza, and as you heard with raf sanchez, you heard some of that. You also start to see the attacks coming from israel. Last night, they hit 500 targets in gaza. They say there are still maybe dozens of hamas fighters still in israel. Theyve mostly secured the area around the border, but as you were discussing, the main issue becomes where are the hostages, how do we get them out. Theres been a lot of talk about whos going to go in, and how theyre going to do that. That is a very complicated issue. A city that would normally be busy or at least have people around. Its empty. These are buses that are not going anywhere. The streets are empty. This is a country in fear tonight, and the stakes are high. Were waiting for Prime MinisterBenjamin Netanyahu to speak very shortly and address the country. Katy. The iron dome is usually so effective, very few rockets get through, but some did land on the city of telaviv. Reporter yeah, look, this is a its a capital city. Its a city thats usually very busy. There are thoroughfares around me. Its late at night. You wouldnt normally see too much traffic. Were seeing buses that are still running. Theyre empty, nobody at all on any of these buses. Mostly i have seen police cars around here. There have been, not getting a lot of Rocket Strikes here. We got one on saturday night. The airport is not far from here, and that has been hit, so this is the way things are going. At night it starts to escalate, and you start getting these rockets still flying in both directions. For all of the attacks that the israelis have leveled on what they say are hamas, and operational and military targets in gaza, somewhere there are still rockets being sent into israel. The home front, the Civil Defense in israel has reminded people across this country to store up food. They say that he should have at least three days of Nonperishable Food and water in case this escalates, and the escalation, you talked to matt bradley could be coming from hezbollah in the north. It doesnt seem to be serious at the moment. Theres a possibility the Southern Front with gaza has called up 300,000 reservists, never in this country have you heard of such a thing. We have been talking about the tension in the west bank thats been escalating. That is also escalating tonight. In fact, two Police Officers have been killed in skirmishes in the west bank. Theres no army in the west bank. Its not going to be a Military Operation in that way. Thats where israel has been putting its troops and reserves for the last ten months. This is a very big country wise issue in israel. People i have talked to have said they have not experienced this level of threat or fear in this country in a very long time. The nations airline is adding to the number of flights that are bringing reservists back to israel so that they can partake, they can participate in the effort to fight. And families in israel across the entire country sleeping in bomb shelters each night with the fear of more rockets coming. Ali velshi, thank you very much. And new video showing a 12yearold being kidnapped by hamas militants. His family spoke to nbc news. Youre watching our special coverage. Stay with us after this quick break. Break. vo if your Thyroid Eye Disease was diagnosed a long, long time ago you may think your eyes will be bulging forever. Like a neverending curse that cant be broken. 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