Gaza militants fired dozens of rockets into Israel on Saturday and an Israeli air strike killed one Palestinian gunman as hostilities flared across the border for a second day.
The escalation began on Friday, when two Israeli soldiers were wounded by Gaza gunfire near the border.
A retaliatory Israeli air strike killed two militants from the Islamist Hamas group that governs Gaza.
Two other Palestinians protesting near the frontier were also killed by Israeli forces.
On Saturday Israel hit Gaza with air strikes and tank fire after Palestinian militants fired more than 90 rockets toward Israeli cities and villages.
The Israeli military said it had targeted rocket launchers and Hamas posts.
The flare-up, which prompted Israeli prime minister Binyamin Netanyahu to convene his security council, comes days before Muslims begin the holy month of Ramadan and Israelis celebrate Independence Day.
Israel and Hamas have managed to avert all-out war for the past five years.
Egyptian mediators, credited with brokering a ceasefire after a Hamas rocket attack north of Tel Aviv in March triggered a burst of intense fighting, have been working to prevent any further escalation of hostilities.
A small armed pro-Hamas group in Gaza, The Protectors of Al-Aqsa, said one of its men was killed in an air strike on Saturday.
The Gaza health ministry said four Palestinian bystanders were wounded, and the Palestinian education ministry said it was evacuating schools in areas under Israeli bombardment.
Across the border, rocket sirens sent Israelis running to shelters, but there were no reports of casualties as many of the missiles were intercepted.
Mr Netanyahu will convene security chiefs on Saturday to discuss the situation, a source in his office said.
Three wars since 2007
Hamas would “continue to respond to the crimes by the occupation and it will not allow it to shed the blood of our people,” its spokesman Abdel-Latif al-Qanoua said in a statement on Saturday.
He made no explicit claim for Hamas having fired the rockets.
One of the attacks was claimed by the Palestinian Democratic Front for the Liberation of Palestine (DFLP), which said it fired rockets at the Israeli city of Ashkelon.
Israel has waged three wars on Gaza since Hamas took control of the territory in 2007.
Israeli air strikes in retaliation for rockets from Gaza are a frequent occurrence.
The Palestinian Islamic Jihad militant group in Gaza said in a statement that the rocket barrages were a response to Friday’s events and that Israel has been delaying the implementation of previous understandings brokered by Cairo.
Hamas said on Thursday that its Gaza chief, Yeyha Al-Sinwar, had travelled to Cairo for talks on efforts to maintain calm along the border and alleviate hardship in the enclave.
Some two million Palestinians live in Gaza, whose economy has suffered years of blockades as well as recent foreign aid cuts. Unemployment stands at 52 per cent, according to the World Bank, and poverty is rampant.
Israel says its blockade is necessary to stop weapons reaching Hamas and other armed groups in Gaza. –Reuters