Palestinian militants have attempted to hit Israel’s commercial capital, Tel Aviv, with missiles fired from Gaza.
Residents took cover after air raid sirens alerted them to a missile threat for the first time in two decades, but there were no casualties.
Israel’s defence minister authorised the call-up of 30,000 reservists.
Three Israelis were killed by rockets from Gaza earlier, while 15 Palestinians have been killed in two days of Israeli attacks on Gaza.
Israel said 274 missiles had been fired from the Gaza Strip into Israel since Wednesday afternoon.
While some have been intercepted by Israel’s Iron Dome missile defence system, others have hit their targets, including a direct hit on a block of flats in the town of Kiryat Malachi.
Two women and a man living on the top floor were killed.
Israeli Defence Minister Ehud Barak said: “This escalation will exact a price that the other side will have to pay.”
‘Steadfast’
However, Hamas prime minister, Ismail Haniyeh, condemned what he called Israel’s “ferocious assault” against Gaza.
“We here in Gaza will remain steadfast and unshaken,” he said in a televised statement. “We will fend off the aggression.”
The two rockets fired at Tel Aviv landed south of the city, in Rishon Lezion, and in the sea.
The armed wing of Islamic Jihad said it had fired an Iranian-built rocket at Tel Aviv, AFP news agency reported.
“The Quds Brigades hit the occupied city of Tel Rabea (Tel Aviv) with a Fajr-5 rocket causing a large explosion to shake the city,” the group said in a brief statement.
This is the first time Tel Aviv has been threatened by missiles since the 1991 Gulf War, when missiles fired by Saddam Hussein’s Iraq landed in the city.
The Times of Israel website says sirens were also sounded in the Tel Aviv suburbs of Bnei Brak, Givatayim and Ramat Gan.
BBC has the full article