Israeli forces have struck targets in the Gaza Strip, killing one Palestinian and wounding more thanr 30 others as militants launched dozens of rockets in some of the heaviest fighting the area has seen in months.
The flare-up increases pressure on the Israeli government to put an end to the violence, which escalated over the weekend and could turn into a major conflagration just two months before the country's general election.
Israeli leaders quickly amped up their rhetoric, warning Gaza's Islamic Hamas rulers they will pay a heavy price should they allow rocket fire toward Israel continue.
"The world must understand that Israel will not sit idly in the face of attempts to attack us," said Israeli Prime Minister Benjamin Netanyahu. "We are prepared to intensify the response."
Low-level cross-border fighting is common in the border area, but clashes escalated Thursday night when an explosives-packed tunnel under the Gaza-Israel frontier blew up, in what the Israeli military called an attempt by Palestinian militants to kill or kidnap soldiers.
Palestinians said the blast was a roadside bomb to avenge an 11-year-old boy shot dead earlier in the evening, during an exchange of fire with Israelis.
Then on Saturday, militants fired an anti-tank missile into an Israeli military jeep patrolling the border fence, wounding four soldiers - one critically. Casualties of that order are rare for the Israeli side.
In response, Israel launched airstrikes that have killed six Gazans and wounded almost 40.
Palestinian rocket and mortar barrages have wounded four Israeli civilians and kept a large swath of the country running for cover.
The military said more than 80 rockets had landed in Israel and 12,000 Israeli students stayed home from school on Sunday.
Later in the day, the military said a Palestinian rocket made a direct hit on an Israeli home in the town of Sderot. No injuries were reported.
Yael Talker, a resident of Kibbutz Reim in southern Israel, said her family spent the night in a makeshift shelter in their home.
"Each time the alarms ring, we hope it's the last," she said. "Our patience is running out ... when we sleep, we dream about bombs. It must stop."
Nearly four years ago, before a previous election, Israel carried out a broad military offensive in Gaza to stop years of rocket fire. Hundreds of Palestinians were killed in the operation.
Since then, sporadic rocket fire has continued, but Gaza's Hamas rulers have largely refrained from major rocket attacks.
Israeli Defense Minister Ehud Barak said Israel was assessing the situation. He rejected the suggestion that Israel's upcoming January 22 elections could affect the government's response to the current round of violence.
"I don't think the elections have to have any effect on our response," he said. "It shouldn't cause us to refrain from acting, it's not handcuffing us. But it shouldn't provoke us to take an opportunity to launch an operation."
Hamas' military wing acknowledged taking part in the weekend rocket fire but it accused Netanyahu's hard-line government of escalating the violence in order to win votes in January elections.
"The Israeli government is responsible for all the consequences and implications of its escalation," said Hamas spokesman Fawzi Barhoum. "Hamas will not let Palestinian blood be a price for Israeli political and electoral gains."
Israel considers Hamas responsible for all violence that comes from Gaza, but Hamas' active participation in the fighting could make Israel respond more harshly to the attacks.
In a precautionary measure, Hamas evacuated major security installations in fear of an Israeli attack. But political leaders and government officials worked in their offices as usual.
While it remains virulently anti-Israel, Hamas has largely refrained from major attacks over the past four years. It has also sought to keep things quiet as it consolidates control in the territory, which it seized five years ago in a violent takeover.
It is under pressure however from smaller militant groups in Gaza to prove it remains in confrontation with Israel, and it sometimes joins the hostilities.
The coastal strip is home to numerous militant groups, including murky al-Qaida-inspired organizations that do not answer to Hamas.
Gaza has also been flooded with weapons in recent years, many of them believed to have been smuggled from northern Africa and into Gaza through tunnels under the Egyptian border.