The Palestinian Islamist movement Hamas has fired a volley of rockets into southern Israel following a series of air strikes by Israeli forces.
Hamas said it was responding to “Zionist aggression”, after accusing Israel of killing five of its fighters.
Israel denied killing the men, but warned of a “deterioration” and said 1,500 reservists had been called up.
Tension has spiked in recent days over the murders of three young Israelis and a Palestinian teenager.
An Israeli official said about 20 rockets were fired in just a few minutes on Monday night, adding that four had been destroyed by the Iron Dome anti-missile system.
Hamas released a statement saying it had “fired dozens of rockets” on several towns in central and southern Israel.
There was no immediate word on casualties or damage in Israel.
A Hamas spokesman had earlier accused Israel of killing the five militants during Sunday’s air strikes and called it a “grave escalation”.
He promised Israel would “pay a tremendous price”.
But Israeli military spokesman Lt Col Peter Lerner denied the claims, saying the men had died on Sunday in a tunnel that had been bombarded by Israel on Thursday.
He said the militants went into the tunnel to assess the damage from the air strike and meddled with some explosives, which were apparently detonated accidentally.
The Israeli military said its air strikes on Sunday night had hit “terror sites and concealed rocket launchers” in response to earlier rocket and mortar fire from Gaza.
Col Lerner said the military was now preparing for a deterioration in Gaza, and had called up 1,500 reservists.
Elsewhere in Gaza, Hamas said a drone had attacked a site in northern Gaza on Sunday, killing one fighter.
Two other militants were killed in a separate strike east of the Bureij refugee camp in central Gaza, the Islamist movement’s military wing said.
Foreign Minister Avigdor Lieberman has criticised Prime Minister Benjamin Netanyahu’s response to the rockets as too weak.
On Monday, Mr Lieberman said his Yisrael Beitenu party was scrapping a 20-month alliance with Mr Netanyahu’s Likud party as a result.
‘Full extent of law’
Meanwhile, Mr Netanyahu has been attempting to reassure the family of murdered Palestinian teenager Mohammed Abu Khdair that the authorities will take action.
The prime minister’s office said Mr Netanyahu had met the youth’s father and offered his condolences.
“We acted immediately to apprehend the murderers,” Mr Netanyahu’s office quoted him as telling Hussein Abu Khdair.
“We will bring them to trial and they will be dealt with to the fullest extent of the law.”
On Sunday, Israeli police said they had arrested six Jewish suspects in connection with the death of the 16-year-old from East Jerusalem.
Investigators said he was “murdered because of his nationality”, but further details have not been divulged because the case is subject to a gagging order.
Just hours before his death, funerals were held for three Israeli teenagers whose bodies were found in the occupied West Bank on Monday.
The Israeli authorities have named two known Hamas operatives who they say abducted and killed Naftali Frenkel, Gilad Shaer – both 16 years old – and Eyal Yifrach, 19, last month. The group denies any involvement.
Mohammed Abu Khdair’s family believe he was killed in revenge for the three murders.