There were no immediate reports of injuries in Tuesday's strikes on Gaza.(Photo: AFP)
Israel denied it has agreed to a ceasefire with Palestinian militants in Gaza as claimed by Hamas after the worst military flare-up since a 2014 war, but calm returned Wednesday and there were signs the latest crisis may be ending.
The exchange of fire on Tuesday and into the early hours of Wednesday had raised the possibility of yet another war in the beleaguered Palestinian enclave run by Islamist movement Hamas, which would be the fourth since 2008.
Israel said it targeted some 65 militant sites in the Gaza Strip. It also said around 100 rockets and mortars fired from Gaza either exploded in Israel or were intercepted by air defences.
Three Israeli soldiers were wounded, one moderately and two lightly, the military said. There were no reports of casualties in Gaza.
Late Tuesday, an Islamic Jihad spokesman said a ceasefire had been reached, and on Wednesday senior Hamas official Khalil al-Hayya also spoke of an accord.
Calm returned to the Gaza Strip and nearby Israeli communities on Wednesday.
Israeli Intelligence Minister Yisrael Katz denied talk of a deal, though a senior defence official reportedly said Israel would refrain from further strikes if there was no more fire from Gaza.
"Israel does not want the situation to deteriorate, but those who started the violence must stop it," Katz told Israeli public radio.
"Israel will make (Hamas) pay for all fire against Israel."
'Should be outraged'
Tuesday's violence followed weeks of deadly unrest along the border between Israel and the blockaded Palestinian enclave.
In a rare joint statement, Hamas and Islamic Jihad declared shared responsibility for the rocket and mortar fire, saying it was in retaliation for Israeli attacks targeting their positions.
Three Islamic Jihad members were killed in an Israeli strike Sunday, and the group vowed revenge. Islamic Jihad is the second-largest armed group in Gaza after Hamas.
The United Nations Security Council is expected to meet Wednesday to discuss the violence, following a US request for an urgent meeting.
"The Security Council should be outraged and respond to this latest bout of violence directed at innocent Israeli civilians," US ambassador Nikki Haley said.
Kuwait, a non-permanent council member representing Arab countries, circulated a draft resolution calling "for the consideration of measures to guarantee the safety and protection of the Palestinian civilian population".
Early Tuesday, some 28 mortar shells were fired toward Israel from the Gaza Strip.
Israel said most were intercepted by its air defence systems but put residents in the area on high alert, ordering them to stay within 15 seconds of shelters.
One mortar shell exploded near a kindergarten building, a military spokesman said, damaging the structure. No children were present at the time.
It was the largest barrage fired from Gaza into Israel since a 2014 war and led to Israel's biggest response since then.
Prime Minister Benjamin Netanyahu had vowed Tuesday to "respond to these attacks powerfully".
Shortly after he spoke, Israel's military began air strikes. Explosions shook the Palestinian enclave and smoke rose from the sites hit.
Later in the day, further rockets and mortar rounds from Gaza were intercepted or exploded in Israel, the army said.
It said some of the mortars fired were supplied by Iran.
On Tuesday night, a rocket hit an Israeli home near the Gaza border, but no one was hurt, the military said.
'Any upcoming escalation'
Israel's military said it hit "military targets" including a tunnel stretching into its territory, weapons stores and militant bases.
Hamas said in a statement Tuesday that "what the resistance carried out this morning comes within the framework of the natural right to defend our people".
Tuesday's incidents followed weeks of deadly demonstrations and clashes along the Gaza-Israel border, beginning on March 30.
The protests demanded that Palestinians who fled or were expelled in the 1948 war surrounding Israel's creation be allowed to return to their former homes, now inside Israel.
They peaked on May 14, when at least 61 Palestinians were killed in clashes as tens of thousands of Gazans protested the US transfer of its embassy in Israel to the disputed city of Jerusalem the same day.
Low-level demonstrations and clashes have continued since.
At least 122 Palestinians have been killed by Israeli fire in the unrest. No Israelis have been killed.
Israel says its actions are necessary to defend its borders, accusing Hamas of encouraging thousands of Palestinians to break through the border and attack Israelis.
But Israel has faced international criticism and calls for an independent investigation over its use of live fire during the protests and border clashes.