Israel's confirmed one of its soldiers, who went missing in Gaza, was killed in battle.

Hadar Goldin was thought to have been captured by Hamas.

The death of the 23 year old was confirmed, as Israel's Prime Minister warned the ground offensive would continue for as long as necessary.

"We do not accept a continuation of the shooting," he told reporters, referring to ongoing Hamas rocket attacks.

"It (Hamas) will have to understand, however long that takes, that it will pay an intolerable price, from its perspective, for continuation of the shooting."

Israeli airstrikes killed another 12 Palestinians overnight, emergency services in the territory said.

Nine of the victims were in the southern town of Rafah, where Second Lieutenant Goldin died.

Israel launched its aerial offensive on July 8 with the declared aim of ending "persistent" rocket fire by militants.

It subsequently sent in ground troops, shifting the focus of the operation to the destruction of a complex system of cross-border tunnels, which Israel claims were used by Hamas to infiltrate the country.

Israeli military officials have reported that 31 tunnels have since been destroyed, fuelling speculation that the offensive could soon wind down.

However, Mr Netanyahu made clear that despite this success, the destruction of the tunnels alone would not ensure the safety of Israelis.

The Palestinian death toll now stands at more than 1,660.

Another 440,000 people, a quarter of Gaza's population, have been displaced by the fighting.

On the Israeli side, 63 soldiers and three civilians have lost their lives.