The Israeli army earlier on Wednesday said Palestinians fired at least 36 rockets across the border.
At least three Palestinians, including a pregnant woman and her 18-month-old child, were killed by Israeli air attacks and artillery shelling on the besieged Gaza Strip, according to the Palestinian health ministry.
A Palestinian was killed in northern Gaza, while at least six were wounded in raids aimed targeting sites across the strip, the Gazan health ministry said.
The strikes came after two rockets launched from the coastal enclave hit the town of Sderot, near Gaza's northern border, police and the army said.
Smoke plumes rising following an Israeli air strike on Gaza City tonight.
Gaza residents reported several Israeli airstrikes after the Palestinian rocket barrage.
Israel's military on Thursday warned Hamas against a further escalation in violence, and Israeli media said officials were considering evacuating residents from areas near the Gaza border.
Hamas, the Islamist group that runs the Strip, named the dead man as Ali Ghandour, saying he was a member of the group's armed wing.
In a statement, the Hamas terror group said: "We are delivering on our promise".
The strikes came after two fighters from the military wing of Hamas, which rules Gaza, were killed by Israeli fire on Tuesday.
The Israeli army said Wednesday's violence began with militants firing guns at an Israeli engineering vehicle, and Israeli troops responding with tank fire.
There were no immediate reports of fresh Israeli injuries or damage.
The gathering had raised hopes a deal for a lasting truce with Israel, with the backing of Egypt and the United Nations.
The push for a long-term ceasefire agreement follows months of clashes between Israel and Hamas, marked by a surge in cross-border arson attacks, rocket fire, and violent clashes which brought the sides to the brink of a full-scale war in two separate military flare-ups in July.
More than a dozen Israelis were hurt Wednesday night as Gaza's ruling Hamas terrorist organization launched a massive, evening-long rocket attack on southern Israel.
The Swedish vessel, named "Freedom for Gaza", was intercepted on August 4th and taken to Israel's port Ashdod its organizers said - the second such boat of the "Freedom Flotilla" prevented from reaching Gaza.
In an earlier statement, the Israeli military said gunmen had fired on its soldiers from a Hamas post, which was shelled by a tank in response.
Israeli Prime Minister Benjamin Netanyahu convened an emergency meeting of the security cabinet due to the growing tensions in the Gaza Strip which was attended by Defense Minister Avigdor Liberman and senior commanders.
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