REUTERS/Suhaib Salem
It was the worst violence between Israeli and Palestinians in the coastal enclave since a ceasefire was agreed last November at the end of an eight-day conflagration.
The Israeli military said its aircraft targeted a tunnel used by militants to facilitate attacks on Israelis and accused Hamas, Gaza's rulers, of breaching the terms of the ceasefire.
A Hamas source said three of its men were in the tunnel at the time of the attack and died in the blast.
Hours earlier, one Palestinian militant was killed and five
Hamas has said it dug the tunnel. Israel says the underground chamber ran for 1.7km (1 mile) and was intended to let militants cross deep beneath the border fence and carry out surprise attacks.
The Israel-Gaza frontier had been mostly quiet for the past year following the Egyptian-brokered ceasefire.
However, on Monday Gaza militants fired two rockets at a southern Israeli coastal city and Israel bombed what it said were two concealed rocket launchers in northern Gaza. There were no casualties in those incidents.
(Reporting by Nidal al-Mughrabi; Writing by Maayan Lubell; Editing by Crispian Balmer)