Israeli warplanes have attacked smuggling tunnels between the Gaza Strip and Egypt, after militants in Gaza fired at least two rockets into southern Israel. The tit-for-tat violence is further complicating prospects to draft a truce between Israel and the militant Islamic group Hamas.
The rocket attacks have again become an almost everyday occurrence in the four weeks since Israel called off its 22-day offensive on militants in Gaza.
Nearly a month after both sides declared separate cease-fires, efforts by Egypt to mediate a durable truce are deadlocked.
Hamas wants Israel to open all of its border crossings, including one to Egypt. Israel wants Hamas to stop militants from firing rockets into its territory and the smuggling of weapons into the seaside enclave.
Israeli officials say they will not consider reopening border crossings until Hamas returns Gilad Schalit, an Israeli soldier who has been held since he was captured in the Gaza Strip in 2006.
Hamas legislator Mushir al-Masri, a spokesman for the militant Islamist group, rejected any attempt by Israel to link the release of Schalit to a longer-term cease-fire.
Al-Masri says Hamas' position is obvious. He says Hamas wants a cease-fire and is not backing away on that issue. But he says the Israeli attempt to connect the Schalit case with a cease-fire agreement is going to destroy the process and he says Hamas considers that "a stab in the face" of the Egyptian efforts to mediate peace.
Hamas is also demanding that Israel release hundreds of prisoners - including militants who were responsible for a number of suicide bombings - in exchange for Schalit.
Despite the setbacks, prospects for a truce remain alive.
Israeli officials say the country's security cabinet is due to meet Wednesday to discuss a response to Hamas' demands, and details of a possible peace deal.