Israel and Palestinian militants resumed fire across the Gaza border today, sparking panic across the war-torn enclave and halting truce talks.
Gaza emergency services said that a woman and a child were killed and 16 people injured in one strike in Gaza City.
Another eight people were hurt in earlier air raids across the strip, they said.
An Israeli military statement said that at least eight rockets were fired at Israel, with six falling on open ground and two more being intercepted by missile defences.
The rocket fire began several hours before a 24-hour truce was to expire, prompting Israel to order its negotiators back from ceasefire talks in Cairo and launch a new round of air strike on Gaza.
They hit at least 10 targets, according to army radio.
The fighting shattered nine days of relative quiet in the skies over Gaza and cast a dark shadow over Egyptian-mediated efforts to hammer out a longer-term truce.
"There has been no progress," Azzam al-Ahmed, the chief Palestinian negotiator in Cairo said today. "Matters have become more complicated."
A statement from Hamas spokesman Fawzi Barhum accused Israeli Prime Minister Benjamin Netanyahu of deliberately obstructing truce efforts and said that the militant Islamist movement would now "examine all options in the light of developments in the situation and facts on the ground." But Israel's US ally put the blame squarely on the group itself.
"Hamas has security responsibility for Gaza rocket fire came from Gaza," State Department spokeswoman Marie Harf said.
"As of right now, with today's developments, we are very concerned and it is our understanding the ceasefire has broken down."
The renewal of Israeli air strikes spread panic among Gaza residents.
A rocket fired from Gaza struck as far as the Tel Aviv area on Tuesday, the Israeli military said, in the deepest rocket attack since a truce calmed fighting about 10 days ago.
Hamas's armed wing claimed responsibility for the rocket, which Israel said landed in an open area, causing no casualties. It was fired after Israel's first lethal air strike since the
breakdown of a truce earlier in the day that killed three people and wounded 40.
An AFP reporter saw hundreds of Palestinians streaming out of Shejaiya, an eastern area of Gaza City which has been devastated by more than a month of fighting between Israel and the militant Islamist Hamas movement.
Hamas Islamists said they had fired 40 rockets at Israel, one of them aimed at Ben-Gurion Airport near Tel Aviv, the country's main international airport.
There were no reported strikes near the airport though Israeli media reported rockets hit in the greater Tel Aviv area.
More poured out of the Zeitun and Shaaf areas, alarmed by a series of explosions and heading to shelter in UN schools, local witnesses said.
An Israeli official said the country's negotiating team had been ordered back from Cairo where Egypt has been pushing for a decisive end to the Gaza bloodshed, which has killed more than 2,000 Palestinians and 67 on the Israeli side.
"The Cairo process was based on the premise of a total ceasefire," another official told AFP. "If Hamas fires rockets, the Cairo process has no basis."