Israel vowed to punish Hamas militants after scores of rockets fired from Gaza seriously wounded two people, provoking air strikes that killed four Palestinian militants.
On the Palestinian side, one source speaking on condition of anonymity, said that a truce negotiated with the help of Egypt had come into force from midnight local time.
But it came after a bloody 24 hours and bellicose statements from both sides.
From late on Tuesday Israeli warplanes launched air raids on Gaza in response to rocket fire that seriously wounded two Thai workers inside Israel. The air strikes killed four Palestinian militants.
Hamas’ armed wing had been involved in firing 72 rockets and mortars at Israel on Wednesday, said Israel’s military.
But from 7.30pm, no further firing of missiles was detected, the Israeli army said.
The latest surge in violence started early Tuesday when a roadside bomb severely wounded an Israeli soldier. That attack was claimed by the armed wing of the leftist Popular Front for the Liberation of Palestine.
Then on Tuesday evening, Palestinian militants fired six rockets at Israel, shortly after a high-profile visit to Gaza by Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani.
In response, Israeli aircraft killed two militants from Hamas’ armed wing, the Ezzedine al-Qassam Brigades, in northern Gaza. Palestinian militants hit back with even more rocket fire.
An early-morning Israeli raid near southern city of Rafah on Wednesday killed a third militant from the Popular Resistance Committees (PRC). Another Hamas militant hurt in air strikes died of his injuries later, medics said.
Militants from Hamas and the PRC claimed responsibility for the rocket fire.
“Hamas will receive its punishment for what has happened here,” Israeli Defence Minister Ehud Barak said Wednesday.
“If they cannot be calmed, and the rockets continue, then the IDF [military] will act,” Barak added.
He was speaking as he toured the area around Gaza, hours after the strikes that had wounded the two Thai workers and hurt four other people.
Since the start of this year, nearly 600 rockets and mortars had been fired at southern Israel, he said.
The Hamas government issued a statement “condemning the Zionist aggression against the Gaza Strip,” and warning of its consequences.
It called on Arab leaders to visit the Gaza Strip in solidarity with its people, while expressing satisfaction at “the historic visit of the emir of Qatar.”
Palestinian negotiator Saeb Erakat said Israel “bears full responsibility for what happens to our people in Gaza.”
UN peace envoy Robert Serry, deploring the escalation, called on all parties to exercise utmost restraint.
Israeli Prime Minister Benjamin Netanyahu warned any continuation of rocket fire would prompt a “much more extensive” Israeli response.
“We neither chose nor initiated this escalation but if it continues we are prepared for much more extensive and deeper action,” Netanyahu said. He was speaking during a tour of the Iron Dome anti-missile battery near Ashkelon, which brought down eight rockets during the day.
“In any case, we will continue with preventative operations. Whoever intends to attack Israeli citizens needs to know that he will bear the consequences.”
Netanyahu also said he had decided to increase protection for Israeli communities located near the Gaza border but not covered by the Iron Dome system.
Deputy foreign minister Danny Ayalon told public radio Israel “must strengthen its deterrence against Hamas by attacking the heads of this terrorist organisation or by destabilising its rule.”
But army spokesman Brigadier General Yoav Mordechai said overthrowing Hamas “would require a prolonged operation with multiple implications, mainly political.
“This option does exist but I don’t think that we have reached the stage where we are talking about this option,” he told the radio.
The only crossing between Gaza and Israel in the north of the Palestinian territory was blocked meanwhile, preventing dozens of people from travelling, including patients, said officials.