Palestinian health officials said two teenagers had been killed by one air strike in what was one of the worst flare-ups since the 2014 Israel-Gaza war.
A spokesman for Israeli Prime Minister Benjamin Netanyahu did not respond to a request for comment.
Hamas spokesman Fawzi Barhoum told Reuters: “Efforts by many parties have continued since the beginning of the escalation and the Israeli bombardment on Gaza. They were crowned by the success of the Egyptian effort to restore calm and end the escalation.”
The Palestinian Islamic Jihad group said in a separate statement that a truce had been reached.
A senior Israeli defence official said: “Only the facts on the ground will dictate our further response.”
The surge in violence followed mounting public criticism of Netanyahu over failure to counter a new Palestinian tactic: incendiary kites and balloons launched from Gaza that have burned crops and scrubland in southern Israel.
Two Palestinian teenagers were killed yesterday, Gaza health officials said, in one of more than 40 air strikes carried out in Gaza by the Israeli military since Friday.
The military said some 100 rockets were launched from Gaza at southern Israel, where many residents have reinforced rooms in their homes but only seconds to reach them between the time sirens blare and missiles land.
Some of the projectiles were intercepted by Israel’s Iron Dome system, but police said three people had been wounded in the southern town of Sderot.
“After consultations with the defence minister, the chief of staff and Israel’s top defence officials, we decided on powerful action against Hamas fighters,” Netanyahu said in a video statement.
But Intelligence Minister Israel Katz said the Israeli attacks should not be seen as the start of a military campaign against the Palestinian territory of 2mn, devastated by seven weeks of war with Israel four years ago.
“We are not in a (military) operation. The activity we are engaged in now sends a message that Israel will not tolerate rockets, explosive devices, mortar bombs or (incendiary) kites,” Katz said on Israel’s Channel 12 TV.
“The action we are taking draws a clear red line: that from now on, we will not allow this.”
Blasts from Israel’s air strikes shook homes and shattered windows in Gaza, where plumes of smoke rose from the sites of the explosions.
The Israeli military said one air strike had hit a high-rise building in Aal-Shati refugee camp in the northern Gaza Strip, describing the target as a Hamas urban warfare training facility with a tunnel underneath.
Health officials in Gaza said the building was empty, but two Palestinians aged 15 and 16, among a crowd in a nearby public park, were killed.
Around 10 other passers-by were wounded, the officials said.
Nearby houses were damaged.
Israeli military spokesman Lieutenant-Colonel Jonathan Conricus said the military had warned people before the attack to leave the area.
Rocket warning sirens went off in the Israeli coastal city of Ashkelon, about 12km from the enclave, further north than in recent attacks.
A police spokesman said no hits had been recorded in the city.
Hamas stopped short of claiming responsibility for the rocket fire, but Barhoum earlier called it “an immediate response by the resistance to the escalation” by Israel and a deterrence to further Israeli attacks.”Bombardment for bombardment,” he said.
The fighting began on Friday, when thousands of Palestinians gathered at the Israel-Gaza border area for weekly protests that have now entered their fourth month.
The Israeli military said Friday’s protesters were throwing burning tyres, stones, explosive devices and fire bombs at its soldiers and that one of its officers was wounded by a Palestinian grenade hurled across the border fence.