A fragile ceasefire came into effect on Thursday after the most serious flare-up in violence along the Gaza border since the second Gaza war in 2012.
However, a number of rockets were fired at Israel last night after the truce announcement.
Islamic Jihad officials in Gaza announced the Egyptianbrokered ceasefire on Thursday afternoon, shortly after another wave of Israeli airstrikes in response to militants firing rockets towards two large cities in southern Israel, Ashdod and Ashkelon, in the morning.
An Israeli security official denied a formal ceasefire had been reached but said that “quiet will be met by quiet”, as has been the case in recent years.
Defence minister Moshe Ya’alon instructed the military to be prepared for the possibility of renewed militant rocket fire and ordered a limited call- up of air force reserve units.
“We do not seek an escalation but we will not resign ourselves to any provocation from the organisations in Gaza,” he said.
Israel said it held Hamas, which controls Gaza, responsible, even though the smaller Islamic Jihad claimed responsibility for the rocket fire, which it said was to avenge an Israeli airstrike that killed three of its militants earlier this week.
Overnight on Wednesday, Israeli aircraft pounded militant targets in Gaza after more than 60 rockets and mortars were launched at Israel.
Israeli prime minister Binyamin Netanyahu convened an emergency meeting of the Israeli security cabinet after foreign minister Avigdor Lieberman, who has recently spoken out on the need for a peace deal with the Palestinians, called for Israel to invade Gaza.
“The only way to solve this endless circle of terror is to reoccupy Gaza and clean out the stables,” he wrote on his Facebook page. There was little support for his proposal.
Israel occupied the Gaza Strip from 1967 until 2005, when then prime minister Ariel Sharon ordered a withdrawal, pulling out the troops and evicting more than 8,000 Jewish settlers. Hamas has controlled Gaza since overrunning the forces of Palestinian president Mahmoud Abbas in 2007.
The upsurge in violence coincided with the visit to the region of British prime minister David Cameron, who condemned the rocket fire and warned that a Palestinian state "cannot be a basis for terror".
During a press conference with Mr Cameron in Bethlehem, Mr Abbas condemned the escalating violence. “We condemn all military escalation, including rockets,” he said.
Catherine Ashton, the European Union foreign affairs representative also called for a swift end to the violence.
“I strongly condemn the recent rocket attacks on Israel, for which the Palestinian Islamic Jihad, which is listed by the EU as a terrorist organisation, has claimed responsibility. There can be absolutely no justification for the deliberate targeting of innocent civilians, and I call for an immediate end to such acts,” she said.
Almost all previous rounds of violence have ended with Egyptian mediation between Israel and the militant organisations.
However, relations between Cairo and Gaza have soured since the ousting of Egyptian president Mohamed Morsi and Hamas is banned in Egypt.