The armed wing of the Palestinian governing group, Hamas, says it will resume attacks on Israel following Israeli strikes Friday that killed at least 10 Palestinians.
The Al-Qassam Brigades says it will end an unofficial year-old cease-fire with Israel.
Palestinian officials say Israeli shelling of a beach on the Mediterranean coast of the Gaza Strip killed at least seven Palestinians at a picnic, including three children. The officials also say two Israeli air strikes in Gaza killed at least three Palestinian militants.
The attacks wounded more than 30 people.
Palestinian President Mahmoud Abbas condemned what he called a "bloody massacre" and declared three days of mourning.
The head of Israel's southern command, General Yoav Galant, said the Israeli military is very sorry for the strikes. He also told Israel television there was no intention to harm innocent civilians.
Israel's military has ordered a halt to military strikes in the Gaza Strip while it conducts an investigation. Israel says it is targeting Palestinian militants who fire rockets from Gaza at the Jewish state.
A U.S. State Department spokesman, Sean McCormack, said Israel has a right to defend itself but is encouraged to consider the consequences of its actions
Separately, Palestinian Prime Minister Ismail Haniyeh of Hamas called on President Abbas, from the rival Fatah faction, to abandon a referendum on a statehood plan that includes recognition of Israel. Mr. Abbas is expected Saturday to announce a date of July 31 for the referendum.
Hamas' charter calls for Israel's destruction.