Gaza militants on Monday fired 11 rockets at southern Israel, one of which exploded next to a house, shattering an overnight calm even as Cairo sought to broker an end to 24 hours of bloodshed.
As sirens sounded across the south, Israel's top brass was examining how to put a decisive end to the latest spike in bloodshed, which has seen militants fire more than 120 rockets at Israel, wounding eight, and Israeli fire killing six Palestinians.
After a quiet night on the Israeli side of the border, rockets began falling after 7:30 am (0530 GMT), with 11 aimed at Israel, two of which were intercepted by the Iron Dome anti-missile system, the army said.
No-one was injured but one of the rockets landed in the yard of a house in Netivot, a town five kilometres (three miles) southeast of Gaza City, police said, with medics treating 26 people for shock.
In Gaza, the armed wings of three groups took responsibility for the firing -- the Popular Front for the Liberation of Palestine (PFLP), the Democratic Front for the Liberation of Palestine (DFLP) and the Popular Resistance Committees (PRC).
Following a night in which Israel attacked "a terror tunnel and a weapons facility" in north Gaza and a rocket-launching site in the south, causing no injuries, Israel's Chief of Staff Lieutenant Benny Gantz was on Monday holding a situational assessment with top military officials, public radio said.
Speaking at the Palmahim air force base south of Tel Aviv, where Israeli and US troops are involved in a vast missile defence exercise, Israeli Defence Minister Ehud Barak said efforts to stamp out rocket fire would intensify.
"These are very important days, both for advancing our cooperation (with the US) on missile defence in the face of future challenges, and in light of the ongoing activity against Hamas and terror organisations in Gaza, which is likely to intensify and expand," he said, in remarks communicated by his office.
A day earlier, the minister said Israel would strike with "ever-growing intensity" and that Hamas would pay a "heavy price" if the rocket fire continued, prompting Cairo to step into its usual role as mediator to try to broker a truce, Egyptian security sources said.
Palestinian officials confirmed the truce initiative, with the armed wing of the ruling Hamas movement, and militants from Islamic Jihad affirming their readiness to observe it "provided Israel commits to doing the same."
The latest flareup began on Saturday evening, when militants fired an anti-tank missile at an army jeep, injuring four soldiers.
The military hit back, killing six Palestinians, including two militants and two minors, and injuring more than 30.
Since then, militant groups have fired more than 120 projectiles in southern Israel, which on Sunday injured four people in the border town of Sderot.
With Israeli Prime Minister Benjamin Netanyahu warning on Sunday that Israel was prepared "to escalate (its) actions," European Union foreign policy chief Catherine Ashton on Monday called for calm, urging both sides to "refrain from exacerbating the situation."
"I am very concerned by the latest escalation of violence between Gaza and Israel," she said in a statement, expressing support for Egyptian mediation efforts.
"There is no place for violence in the Middle East. It is only through resumed negotiations that the legitimate aspirations of both Palestinians and Israelis will be met, through a two-state solution."
The spike in violence, which comes as Israel is in the middle of an election campaign, raised the spectre of a broader Israeli military campaign to stamp out rocket fire, although commentators said it was unlikely it would be one on the scale of Operation Cast Lead.
That 22-day operation, which was launched December 2008 just six weeks before the last general elections, claimed the lives of 1,400 Palestinians -- half of them civilians -- and 13 Israelis, 10 of them soldiers.