Tensions remain high on the Gaza border after an Israeli air strike killed two Palestinian militants and critically wounded a third.
Israeli aircraft attacked a Palestinian rocket squad in the Gaza Strip. The Islamic Jihad group said its fighters were targeted and their vehicle was destroyed.
The air strike was launched despite an announcement by armed Palestinian groups that they have agreed to return to an informal cease-fire with Israel. Ismail Radwan is a spokesman for the Islamic militant group Hamas that rules Gaza.
He said the truce depends on Israeli actions, and if Israel attacks, the Palestinians reserve the right to retaliate.
At the weekly Cabinet meeting in Jerusalem, Israeli Prime Minister Benjamin Netanyahu said Israel has "no interest" in an escalation.
"Israel is interested in quiet and security," said Mr. Netanyahu. But he said that Israel "will not hesitate to use the might of the army against those who attack its citizens."
After dozens of Palestinian rocket and mortar attacks during the past week, Israel deployed its new Iron Dome anti-rocket system near the Gaza border. The $200-million Israeli-made system uses cameras and radar to track incoming rockets, and interceptor missiles are fired to shoot them down.
Because of the escalation, Israel deployed the system earlier than planned.
General Doron Gavish said that the system is still in the experimental phase, and it will be tested in combat.
The army says the Iron Dome will change the strategic equation in Gaza. But it is a lopsided equation: One Israeli interceptor missile costs $100,000 compared to $100 for a Palestinian rocket.