Gaza's Islamic Jihad says that an Egyptian-brokered truce has been restored following a brief but intense confrontation a day earlier when Israeli warplanes pounded the Strip after heavy cross-border rocket fire.
But the truce, which was to have taken effect at 1200 GMT (2300 AEDT Thursday), was being tested after the Israeli military reported further rocket fire from Gaza hours later and launched retaliatory air strikes for a second night.
"Israel Air Force aircraft targeted four terror sites in the southern Gaza Strip and three additional terror sites in the northern Gaza Strip," a military statement said.
Palestinian security officials and eyewitnesses said that the targets were facilities of the Hamas military wing, the Ezzedine al-Qassam brigades, near Gaza City and a base of the smaller militant Popular Resistance Committees in the southern town of Rafah.
The army said that five rockets hit Israeli soil during the evening and another two were intercepted midair by the Iron Dome missile defence system.
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Three rockets had also struck during the morning, he said.
On Wednesday at least 60 rockets hit Israel.
No one has yet claimed responsibility for the Thursday rocket fire, but Gaza security sources linked what appeared to be a failed rocket attempt on Thursday night to a Salafist splinter group.
Over the course of 24 hours, Israeli warplanes struck Gaza after militants fired scores of rockets over the border in the worst confrontation since an eight-day conflict in November 2012 between Israel and the Islamist movement Hamas which rules Gaza.
Although there were no casualties on either side, the violence was denounced by both Palestinian president Mahmud Abbas and British Prime Minister David Cameron at a news conference in the West Bank town of Bethlehem.
Behind the scenes, Egypt worked to secure the renewal of a truce agreement to scale back the hostilities, officials in Gaza said.
"An Egyptian-brokered truce went into effect at 2 pm (1200 GMT)," Islamic Jihad spokesman Daud Shihab told AFP.
Earlier, Khaled al-Batsh, an Islamic Jihad leader, said Egyptian officials had contacted Hamas to "restore the truce" with Israel in force since November 2012.
But an Israeli defence official said he was "not familiar" with any ceasefire arrangement.
Despite the tit-for-tat violence, experts said Israel was not interested in a major confrontation in Gaza.
The confrontation began on Tuesday when Islamic Jihad militants fired a mortar at Israeli troops allegedly trying to enter southern Gaza, prompting a retaliatory air strike that killed three of them.
On Wednesday, Islamic Jihad's armed wing, the Al-Quds Brigades launched a coordinated barrage of rockets at southern Israel that continued into the night, with the group putting the number at 130.
Israel responded by hitting 29 targets across Gaza overnight, including Islamic Jihad and Hamas bases. Another seven air strikes on southern Gaza followed during the morning.
Defence Minister Moshe Yaalon blamed both Islamic Jihad and Hamas, saying the latter was responsible for any fire emanating from its territory.
