Violence resumed in Gaza this week after militants fired a rocket into Israel on Tuesday.
Various Gazan militant groups were firing barrages of rockets from the Gaza Strip into Israel on Saturday in response to the Palestinian casualties killed on Friday. Several Gaza residents were wounded.
Smoke rises in the Israeli city of Ashkelon following a rocket attack over the border between Israel and Gaza, as seen from the Israeli side of the border.
By nightfall, the army said militants had fired well over 200 rockets into Israel. An Israeli security source said, however, that no such discussions on the issue were taking place.
The current round of violence started on Friday when two Israeli soldiers were hit by sniper fire from the Gaza Strip.
Four Palestinians, including two Hamas militants, were killed after two Israeli soldiers were wounded in a shooting during weekly protests on the border.
The flare-up marked the first Israeli strike in more than a month of relative calm that followed the unofficial deal. The elections were sparked, in part by the resignation of Defense Minister Avigdor Liberman, who called for a tougher approach from Israel to the rocket fire. On Thursday, Israel said its aircraft struck a Hamas military compound after balloons carrying firebombs and explosives were launched across the border.
The Israeli warplanes had raided Beit Hanoun area in northern Gaza, killing one Palestinian and leaving some injuries.
The airstrike happened in east Gaza City, the ministry said, as Israel continued its aerial offensive in response to rockets that Gaza militants have fired throughout the day toward southern Israel.
Eurovision is the largest televised event in the world, and the Palestinians hope to crash Israel's hosting of the competition in hopes of reinvigorating world sympathy for their nationalist cause.
Around two million Palestinians live in Gaza, which has suffered economically from the Israeli blockade as well as recent foreign aid cuts.
COGAT, the Israeli defense body responsible for Palestinian civilian affairs, said it was closing the fishing zone off Gaza's coast altogether and sealing Israel's two land crossings with Gaza.
Hamas would "continue to respond to the crimes by the occupation and it will not allow it to shed the blood of our people", its spokesman Abdel-Latif al-Qanoua said in a statement on Saturday.
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