Bolivian President Evo Morales has declared Israel a "terrorist state" because of its ongoing air and ground offensive on the Gaza Strip.

The Latin American country also renounced its visa exemption agreement with Israel. Israeli citizens, under a 1972 agreement, were allowed to travel freely into Bolivia without applying for a visa.

Morales condemned the agreement for being "signed under a dictatorial regime" and categorised Israel as a "group 3" country.

"In other words we are declaring (Israel) a terrorist state," he said, speaking on the visa decision.

"Israel does not respect the principles or purposes of the United Nations charter nor the Universal Declaration of Human Rights," Morales added.

The Bolivian government had previously cut diplomatic ties with Israel in 2009 following strikes on the Gaza Strip in what was named 'Operation Cast Lead'.

El Salvador has joined four other Latin American countries - Brazil, Chile, Ecuador and Peru - in recalling its ambassador from Tel Aviv in protest at the ground and air offensive in the territory.

Spokesman for the Israeli Foreign Ministry, Yigal Palmor, crticised the decisions of the Latin American countries as an encouragement to Hamas militants to continue their rocket and tunnel attacks on the country.

"Israel expresses its deep disappointment with the hasty decision of the governments of El Salvador, Peru and Chile to recall their ambassadors for consultations," said Palmor.

"This step constitutes encouragement for Hamas, a group recognised as a terror organisation by many countries around the world."

The UN claims 225,178 Palestinians are now taking refuge in 86 shelters while the Gaza health ministry said 1,364 Palestinians have been killed, 315 of those children.

The Israeli military has confirmed the deaths of 56 soldiers while two Israeli civilians and one Thai national have also been killed in the conflict.