Palestinian Authority President Mahmoud Abbas demanded that Israel stop "escalation" in Gaza after its air force bombed nearly 30 targets in the besieged enclave.

The Israeli military pounded the Palestinian territory in retaliation for "scores" of rockets fired into southern Israel by Islamic Jihad resistance fighters overnight.

But the group said the rocket fire was itself a response to an Israeli air strike on Gaza on Tuesday which killed three of its members.

The sudden surge in violence marks the worst conflict between Israel and Gaza since November 2012 and prompted Israel's far-right Foreign Minister Avigdor Lieberman to say his country had "no choice" but to reoccupy the strip.

Israeli forces left Gaza in 2005, though Tel Aviv has subjected it to an inhuman blockade and periodic bombing ever since.

Few in Israel echoed Mr Lieberman's blood-curdling threats to restart a full war, with former national security adviser Yaakov Amidror saying: "Israel has no intention of entering a major operation now" and pointing out that "Hamas is not joining in."

Though Hamas, which governs Gaza, was not involved in the rocket strikes some of its bases were included in Israel's bombing raids.

Hamas spokesman Sami Abu Zuhri said Israel bore "full responsibility" for the escalation.

"We hold the occupation responsible, we warn of the consequences of any escalation and we reiterate that resistance is the right of the Palestinian people to defend itself," fellow spokesman Ihab al-Ghassin added.

But the group made no move to respond or join Islamic Jihad's rocket fire, which continued .

No casualties were initially reported by either side.

And even Islamic Jihad suggested it had agreed through Egyptian mediation to stop firing if Israel would also agree to a truce.

"As long as the occupation honours the calm, we will honour the calm and instructions are being given right now to al-Quds brigades, our military wing, about this understanding," the group's Gaza leader Khaled al-Batch said.