GAZA Israeli aircraft bombed targets in southern Gaza after dark on Tuesday in response to a rocket attack which hit the Israeli port city of Ashkelon earlier in the day, damaging cars.
There were no immediate reports of casualties after Israeli warplanes struck at smuggling tunnels connecting Gaza with Egypt on Tuesday and fired a missile at a training camp of the armed wing of the Islamist Hamas movement, which rules the enclave.
Israeli Prime Minister Ehud Olmert had warned Hamas of a harsh response to any further rocket fire from Gaza, although the country's defence minister, Ehud Barak, has said he does not foresee a new all-out offensive.
Both sides ordered ceasefires on Jan 18 after Israel's devastating 22-day blitz on Hamas-run Gaza, in which 1,300 Palestinians were killed including over 700 civilians.
Eleven Israeli soldiers and three civilians have been killed since the conflict erupted in late December.
There was no immediate claim of responsibility for the rocket attack on Ashkelon from Palestinian armed factions in the Strip, still reeling from the Israeli offensive.
Israel warned Palestinian residents well in advance that it would hit targets in the border town of Rafah and they fled their homes to avoid injury.
Olmert earlier vowed the "smallest provocation would bring the harshest reaction" until the rocket fire on Israel ceased.
"We prefer, usually, to do things rather than make declarations. And when we do things, they are heard from one end of the country to the other and from one end of Gaza to the other," he said during a tour in northern Israel.
Egypt has been trying with U.S. backing to broker a long-term truce which would end Palestinian arms smuggling and also lead to reopening the coastal enclave's border crossings, one of Hamas's key demands.
Ashkelon Mayor Benny Vaknin said the rocket fired from Gaza struck an open area in the heart of a residential neighbourhood.
There has been sporadic rocket and mortar shelling since the ceasefires were declared, as well as a roadside bomb blast that killed an Israeli soldier on a Gaza border patrol. Militants said they were responding to Israeli fire.
Israel has carried out air strikes but held back from a renewed ground offensive during a surge of violence, in which three Palestinian civilians and a gunman were killed.
Israeli right-winger Benjamin Netanyahu, who opinion polls forecast will become prime minister after an election a week away, said during a solidarity visit to Ashkelon: "The only way to remove the rocket threat is to topple the Hamas regime."
Olmert's government blamed Hamas for the violence, though the Islamist group has claimed responsibility for none of the attacks since the truce.
The flare-ups highlight faultlines in Israel's coalition government ahead of the February 10 election to replace Olmert.
Foreign Minister Tzipi Livni, a centrist candidate, told Army Radio: "Deterrence must now be achieved vis-a-vis Hamas, and deterrence is achieved through force, and great force."
Her rival, centre-left Defence Minister Ehud Barak, has spoken out against launching a new offensive for now.
"We dealt Hamas a very heavy blow, and it is now picking up the pieces. It really is interested in quiet, but the fire (from Gaza) is a fact and can't be ignored," he said in a statement.
Israeli media have suggested that any new reprisals could include the assassination of Hamas leaders, several of whom went to ground during the Gaza offensive and have yet to emerge.
Responding to Egypt's mediation, Hamas said on Monday it would be prepared to halt hostilities for a year if a deal could be reached on lifting Israel's crippling blockade of Gaza.
A Hamas delegation planned to meet Egyptian mediators in Cairo on Tuesday to deliver a response to the truce proposals.
U.S. special envoy to the Middle East George Mitchell, who finished a visit to the region last week to help shore up the cease-fire, is expected to return this month to peace talks.