The tit for tat fire comes after a day of clashes along the Gaza border in which one person was killed and 10 other people wounded. The military said in a statement it had "targeted a terrorist squad in the northern Gaza Strip, in the same location where rockets were fired towards the Israeli city of Beersheva."

Later, war planes bombed several other sites across the coastal strip, which the military called "hubs of terror." It gave no further details. Israeli television broadcast footage of a crater gouged out of a street next to a badly damaged house that was hit by a military grade Grad rocket.

Beersheva is home to about 200,000 people 40 kilometres (25 miles) from the Gaza Strip. Local residents ran to shelters after warning sirens went off before the impact, witnesses said, while emergency services raised the alert level in southern Israel and braced for further attacks.

The army said it held Hamas "solely responsible for maintaining the calm in the Gaza Strip and for any terrorist activity emanating from it." Israeli Deputy Prime Minister Silvan Sahlom said he saw Iran's in the surge of violence, trying to take advantage of the turmoil sweeping the region.

"The rocket attack was a very grave act carried out by the agents of Iran, Hamas," he told public radio.Israel carried out a massive 22-day offensive against the territory to stop rocket fire from Gaza from December 2008 to January 2009, which killed 1,400 Palestinians, more than half of them civilians, and 13 Israelis, 10 of them soldiers.