At least eight people have died, including a senior militant, as a result of Israeli airstrikes, Palestinian officials have said.
A blast was heard in Gaza City on Friday and smoke was seen coming from the seventh floor of a tall building.
The Palestinian Health Ministry said that 40 people were wounded, and a senior Islamic Jihad commander and a five-year-old boy are among the dead.
The strike comes after days of tensions following the arrest of a senior militant in the occupied West Bank on Monday.
Israel had closed roads around Gaza earlier this week and sent reinforcements to the border, in anticipation of retaliation.
“The IDF (Israeli Defence League) is currently striking in the Gaza Strip. A special situation has been declared on the Israeli home front,” the Israeli military said in a statement.
The Palestinian Islamic Jihad (PIJ) and IDF said the official killed was Tayseer al-Jaabari.
Israel airstrikes target Gaza Strip in response to rocket attack
Israel carries out strikes on Gaza in retaliation for rocket fired from the strip
Israel launches strikes on Gaza in retaliation for rockets fired the previous day
According to the IDF he was “responsible for multiple terrorist attacks against Israeli civilians” and shared a picture of him on social media.
Hamas spokesman Fawzi Barhoum said “the Israeli enemy, who started the escalation against Gaza and committed a new crime, must pay the price and bear full responsibility for it”.
In a statement broadcast on Al Mayadeen television, a pro-Iranian Lebanese channel, Islamic Jihad leader Ziad Al Nakhala vowed retaliation for the strikes.
“There are no red lines in this battle and Tel Aviv will fall under the rockets of resistance, as well as all Israeli cities,” he said.
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Israeli Defence Minister Benny Gantz visited communities near Gaza earlier on Friday, saying authorities were preparing “actions that will remove the threat from this region”, without elaborating.
“We will operate with internal resilience and external strength in order to restore routine life in Israel’s south,” he said.
“We do not seek conflict, yet we will not hesitate to defend our citizens, if required.”
The PIJ is smaller than Hamas but shares a similar ideology, with both groups opposing Israel’s presence.
