Around 50 rockets were fired from the Gaza Strip into southern Israel in retaliation after a senior Islamic Jihad commander in Gaza was killed in Israeli airstrikes early on Tuesday, intensifying violence with Palestinian militants.
In northern Gaza an Israeli strike killed Bahaa Abu el-Atta and his wife, setting off a barrage of rockets, some of which reached as far as the Tel Aviv heartland as Islamic Jihad vowed further revenge.
The Israeli military says Abu el-Atta was the mastermind of recent attacks against it, and responsible for most of the rocket, sniper and drone fire from the region.
The IDF said its "Iron Dome" aerial defense system had intercepted about 20 rockets. Schools and businesses have been closed across southern Israel.
"The barrage of rockets being fired by Islamic Jihad in #Gaza at Israeli civilians after our surgical strike on their commander shows exactly why he was targeted in the first place," the Israel Defense Forces said on Twitter.
In a statement, Islamic Jihad said: "These terrorist crimes are aggression and a declaration of war against the Palestinian people, and the enemy bears full responsibility for them."
A spokesman for militant group Hamas, which runs Gaza, warned that Israel's actions could provoke more violence.
"The Zionist enemy's assassination of the leader Mujahid Bahaa Abu al-Atta dangerous escalation, and the continuation of the series of aggression and criminality against our people and its valiant resistance," said Fawzi Barhoum.
Syrian state media accused Israel of an attempted separate attack on another Islamic Jihad leader, Akram Al-Ajouri, in Damascus. He survived but Islamic Jihad claimed that the attack killed one of his sons.
Israeli Prime Minister Benjamin Netanyahu is due to give a press conference Tuesday morning.
Lt. Col. Jonathan Conricus, a military spokesman, told reporters that Abu el-Atta was a "ticking time bomb," saying he had been responsible for a number of recent rocket attacks on southern Israel and claimed that he was actively planning new attacks.
"We essentially over the last week have been waiting for the opportune moment to conduct this surgical strike," he said.
Conricus added that the airstrike had been carried out with a warplane that destroyed only the floor of the building where Abu el-Atta was hiding in order to minimize "collateral damage."
Israel pulled out of Gaza in 2005 but keeps it under a blockade, citing security concerns. Aid officials warn that the 2 million Palestinians living in the narrow strip of land face imminent humanitarian collapse.