Two Palestinians have been killed and three injured by Israeli airstrikes in Gaza, according to Palestinian health officials.
The health ministry said the dead men were civilians, but the Popular Front for the Liberation of Palestine militant group claimed the fighters as their own.
The airstrikes were launched in response to rocket fire from Gaza, which Israeli media said had wounded six people, including a 19-year-old critically injured when a mortar shell hit a bus.
Israel has boosted forces near the Gaza border after around 200 rockets hit the country in three hours on Monday, said military spokesman Lt. Col. Jonathan Conricus.
He said the army had so far hit more than 30 targets belonging to Palestinian militant groups Hamas and Islamic Jihad.
The rocket fire from Gaza is thought to be retaliation for an Israeli raid on Sunday that resulted in the deaths of seven Palestinian militants, including a Hamas commander.
An Israeli soldier was also killed in the fighting.
The Palestinians believe it was an assassination operation – a claim denied by the Israelis.
The latest violence has cast a cloud over indirect talks between the sides after months of bloodshed along the Israel-Gaza border.
The talks, which are backed by Egypt, Qatar and the United Nations, are aimed at brokering a long-term ceasefire.
In recent days, the two sides had reached what Hamas described as “understandings” that would allow cash and fuel into Gaza in an effort to alleviate conditions after an 11-year blockade.
Sky News Middle East correspondent Alex Rossi said: “We are now in a situation which is continuing to deteriorate, the next 12 hours overnight will be crucial.
“The signs to look out for are how far the rockets come out of Gaza, how far they are fired: if they stay around the perimeter that is a sign that perhaps it won’t escalate.
“The Palestinians, Hamas, have said that if the Israeli retaliatory response – and we know Israeli fighter jets are bombarding the strip as we speak – if that response is very hard, say, for instance, they take out senior Hamas figures, command and control posts, they will loosen those rockets off further.
“Then you have a cycle which continues to deteriorate into all-out conflict.
“We have seen three wars between Gaza and Israel, the last in 2014… so people will be watching this very closely over the next few hours, those hours will be very testing.
“We have seen flare ups like this, we have seen this before over the last few months, where it flares up quite dramatically over 24 hours and then the ceasefire is brokered with Egyptian mediation.
“We don’t know what will happen in this case but certainly things are deteriorating as we speak – more rocket fire out of the Gaza Strip and a very heavy Israeli response.”
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