Israeli air strikes flattened homes in Gaza on Saturday and Palestinian rocket barrages into southern Israel persisted for a second day, raising fears of another major escalation in the Mideast conflict.
Gaza's Health Ministry said 29 people had been killed so far in the coastal strip, including six children.
So far, Hamas, the larger militant group that rules Gaza, appeared to stay on the sidelines of the conflict, keeping its intensity somewhat contained.
Israel and Hamas fought a war barely a year ago, one of four major conflicts and several smaller battles over the past 15 years that exacted a staggering toll on the impoverished territory's 2 million Palestinian residents.
Whether Hamas continues to stay out of the fight likely depends in part on how much punishment Israel inflicts in Gaza as rocket fire steadily continues.
'They warned us with rockets'
An air strike in the southern city of Rafah destroyed a home and heavily damaged surrounding buildings.
Gaza's Health Ministry said at least two people were killed and 32 wounded, including children.
Another strike on Saturday hit a car, killing a 75-year-old woman and wounding six other people.
Fighter jets dropped two bombs on the house of an Islamic Jihad member after Israel said they warned people to evacuate the area.
Khaled Mansour, another senior commander of the Palestinian militant group, was killed alongside two fellow militants in the Saturday air strike.
The blast flattened the two-story structure, leaving a large rubble-filled crater, and badly damaged surrounding homes.
Women and children rushed out of the area.
"Warned us? They warned us with rockets and we fled without taking anything," said Huda Shamalakh, who lived next door.
She said 15 people lived in the targeted home.
Among the 29 Palestinians killed were six children and four women.
The Gaza Health Ministry said more than 253 people had been wounded. It does not differentiate between civilians and fighters.
The lone power plant in Gaza ground to a halt at noon on Saturday for lack of fuel as Israel has kept its crossing points into Gaza closed since Tuesday.
With the new disruption, Gazans can get only four hours of electricity a day, increasing their reliance on private generators and deepening the territory's chronic power crisis amid peak summer heat.
Rockets intercepted by Israel's Iron Dome
The Israeli military said an errant rocket fired by Palestinian militants killed civilians late on Saturday, including children, in the town of Jabaliya, in northern Gaza.
The military said it investigated the incident and concluded "without a doubt" that it was caused by a misfire on the part of Islamic Jihad. There was no official Palestinian comment on the incident.
A Palestinian medical worker, who was not authorised to brief media and spoke on condition of anonymity, said the blast killed at least six people, including three children.
Throughout the day, Gaza militants regularly launched rounds of rockets into Israel.
The Israeli military said on Saturday evening that nearly 450 rockets had been fired, 350 of which made it into Israel, but almost all were intercepted by Israel's Iron Dome missile-defence system. Two people suffered minor shrapnel wounds.
One rocket barrage was fired toward Tel Aviv, setting off sirens that sent residents to shelters, but the rockets were either intercepted or fell into the sea, the military said.
Sunday could be a critical day in the flare-up, as Jews mark Tisha B'av, a sombre day of fasting that commemorates the destruction of the biblical temples.
Thousands are expected at Jerusalem's Western Wall, and Israeli media reported that the Israeli leadership was expected to allow politicians to visit a key hilltop holy site in the city that is a flashpoint for violence between Israelis and Palestinians.
Violence poses test for Lapid, dilemma for Hamas
The violence poses an early test for Israeli Prime Minister Yair Lapid, who assumed the role of caretaker prime minister ahead of elections in November, when he hopes to keep the position.
Mr Lapid, a centrist former TV host and author, has experience in diplomacy having served as foreign minister in the outgoing government, but has thin security credentials.
A conflict with Gaza could burnish his standing and give him a boost as he faces off against former prime minister Benjamin Netanyahu, a security hawk who led the country during three of its four wars with Hamas.
Hamas also faces a dilemma in deciding whether to join a new battle barely a year after the last war caused widespread devastation.
There has been almost no reconstruction since then, and the isolated coastal territory is mired in poverty, with unemployment hovering around 50 per cent.
Israel and Egypt have maintained a tight blockade over the territory since the Hamas takeover in 2007.
Iran-backed Islamic Jihad is smaller than Hamas but largely shares its ideology. Both groups oppose Israel's existence and have carried out scores of deadly attacks over the years.
AP
