Israel has carried out more air strikes on the Gaza Strip, following dozens of rockets fired by the Palestinian Islamist movement Hamas.
At least 14 Palestinians, including a woman and two children, were reportedly hurt in the strikes.
Hamas earlier said its members fired rockets to respond to "Zionist aggression", after accusing Israel of killing five of its fighters.
Israel denied the claim, but 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.
The Israeli military said its offensive was part of a campaign, targeting Hamas militants.
The military also deployed more troops near the Gaza border, reports say. However, the Israeli cabinet stopped short of ordering a ground operation for now.
Towns within 40km (24 miles) of the enclave were instructed by the central authorities to close schools and summer camps.
The army said that more rockets were fired into Israel from Gaza.
Palestinian medical and security sources said that nine of the 14 Palestinians were injured when one of the pre-dawn Israeli strikes hit a house of a Hamas activist in the southern town of Khan Younis.
— Reuters Top News (@Reuters) July 7, 2014
Hamas militants reportedly warned they would enlarge the radius of their targets if Israel continued with the air strikes.
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.
— IDF (@IDFSpokesperson) July 7, 2014
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.
Israel said that Hamas had launched dozens of rockets on southern and central towns on Monday.
"Seven rockets were intercepted over the (southern) city of Ashdod and five rockets were intercepted over Netivot," an army statement said, according to the AFP news agency.
Rocket alarm sirens were heard in the Hof Ashkelon and Sha'ar Hanegev areas.
There were no reports of casualties in Israel.
'FULL EXTENT OF LAW'
Meanwhile, Israeli Prime Minister Benjamin 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 Netanyahu had met the youth's father and offered his condolences.
Mobile phone footage appears to show two Israeli policemen punching the 15-year-old cousin of Mohammad Abu Khdair in the head
"We acted immediately to apprehend the murderers," 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 believes he was killed in revenge for the three murders.