 Meanwhile, the Israel Defense Forces, or IDF, will call 6,500 reservists to duty, as part of the Israeli offensive on the Gaza Strip.
The proposal was approved by cabinet ministers during Sunday's cabinet meeting.
Israeli Prime Minister's spokesman Mark Regev said the country will take measures to help protect communities on the Gaza border.
"The first decision was to exercise under the law a emergency status in the south to deal with the difficult situation; secondly to establish economic emergency situation so that supplies of food and services can be continued as should be. We unfortunately believe this is not going to be over quickly, what is required is patience, what is required is fortitude, and there is a need to call up reservist."
Meanwhile, hundreds of Israel Defense Forces infantry and armored corps troops headed for the Gaza Strip border early Sunday in preparation for a possible ground invasion.
IDF sources said that so far, Hamas' response to Israel's aerial attack of strategic targets in Gaza was relatively restrained.
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