Palestinian officials said Thursday that Hamas, the militant group that governs Gaza, had reached a truce with Israel as both sides appeared to be on the edge of another war.
The Palestinians and Hamas TV said a deal was reached after mediation by Egypt and other regional players.
"Palestinian factions will respect calm as long as Israel does," an official told Reuters.
Israel has not confirmed that it reached a truce with Hamas, but one official who asked to remain anonymous denied it a deal had been struck.
Prime Minister Benjamin Netanyahu met with his security cabinet Thursday after the Israelis and Palestinians spent much of the night exchanging rocket fire.
He ordered the army to keep taking "strong action" against the militants and also bolstered the military presence along the Israeli-Gaza border.
Hamas militants fired nearly 200 rockets into Israel overnight Wednesday into Thursday. Israel answered with a similar number of airstrikes.
Palestinian health officials said a pregnant woman and her 18-month-old daughter were killed. Seven Israelis were reported wounded.
"Overall, we condemn the launching of missile strikes into Israel and call for an end to the destructive violence," State Department spokeswoman Heather Nauert said Thursday. "We fully support Israel's right to defend itself and to take actions to prevent provocation of that nature."
Palestinians have held weekly protests along the Israeli-Gaza border since March, when Israel began preparations for marking its 70th anniversary as a state.
Israeli soldiers have killed at least 158 demonstrators, many of whom were militants that Israel said were trying to sneak across the border.
Israel has accused Hamas of organizing the protests as a cover for terrorism, a charge Hamas denies.
The Palestinians want Israel and Egypt to lift their decade-old blockade of Gaza, which the U.N. and Palestinians say has created a humanitarian crisis.
Israel says the blockade is necessary for its security. But some reports say Israel may be willing to ease the blockade.