Heavy fighting has erupted between Arab and Israeli forces along two fronts.
To the south, Egyptian armoured forces have broken the Israeli line on the eastern bank of the Suez Canal.
In the north, Syrian troops and tanks are battling with Israeli defences along the Golan Heights seized by Israel from Syria in 1967.
Both sides have accused each other of firing the first shots, but UN observers have reported seeing Egyptian and Syrian troops crossing into Israeli-held territory.
Israeli defence minister, General Moshe Dayan has told the nation in a televised address: "We must realise this is war. We are engaged in heavy battles on both fronts against numerically superior forces."
The attacks have come on the Day of Atonement, Yom Kippur, and the holiest day in the Jewish calendar.
Most Jews had been observing strict religious rules of fasting and prayer, but with the outbreak of fighting, Israel's civilian reserve force is now rushing to mobilise.
The heaviest fighting has been reported along the Suez Canal and the adjoining Sinai peninsula, seized by the Israelis from Egypt in 1967.
Israel's Prime Minister, Mrs. Golda Meir, claimed in a radio address that heavy losses have been inflicted on both Egypt and Syria.
But an Egyptian military communiqué has stated the Canal is now almost entirely under their control.
Damascus radio said Syrian forces on the northern frontier have captured Israeli positions on the Golan Heights, notably Mount Hermon.
But the claims are being countered by the Israelis, who say the situation in the border region remains "adequate".
Israel is outnumbered three to two in immediately available man-power, three to two in tanks and two to one in combat aircraft against the combined forces of Egypt and Syria.
British Foreign Office officials say there is a risk neighbouring countries may become involved.
Algeria, Libya, Kuwait, Jordan and the Lebanon have all pledged their support for the Arab offensive.