Violence in and around Gaza entered its fourth day on Sunday as militants fired over 20 rockets into Israel and the air force hit targets near Gaza City, a day after a rocket killed an Israeli.

In what was the first air strike since Saturday afternoon, the Israeli air force fired at a target near Beit Lahiya, just north of Gaza City, seriously wounding a 12-year-old boy, medical sources said.

Gaza security sources said militants from the Popular Resistance Committees (PRC) had earlier been seen firing medium-range Grad rockets into southern Israel from the same area.

Tensions in and around the Gaza Strip have soared since Thursday when militants staged a series of bloody shooting attacks in the Negev desert, killing eight Israelis and prompting a wave of bloody tit-for-tat exchanges.

It also sparked a diplomatic crisis with Egypt after Cairo said five policemen were killed by Israeli fire as soldiers pursued gunmen involved in the Negev ambushes.

Israel blamed Gaza's Popular Resistance Committees for the bloodshed and in retaliatory air strikes has killed 15 Palestinians, including seven PRC militants and two from Islamic Jihad's armed wing.

Another 48 people have been injured, half of them women and children, medics said.

In the same period, militants have fired more than 100 rockets and mortars at Israeli towns and cities in the south, killing one and injuring dozens more, one critically.

Three illegal Palestinian workers sleeping rough near Ashdod were also injured by rocket fire from Gaza on Saturday, two of them seriously.

On Saturday night, rockets ploughed into Beersheva, which lies some 40 kilometres (24 miles) from Gaza, killing a man and injuring 15, one critically, Israeli medics said.

But the skies over Gaza remained ominously quiet overnight.

Shortly after the attack, Prime Minister Benjamin Netanyahu convened his inner forum to discuss Israel's response to the violence, although a senior diplomatic official quoted by Haaretz insisted the focus was on containment.

"No-one wants an Operation Cast Lead 2," he told the newspaper, referring to Israel's devastating 22-day operation in Gaza over New Year 2009 which killed more than 1,400 Palestinians and 11 Israelis.

That operation, which ended in January 2009 with a truce which has largely held, was launched to stamp out persistent rocket fire on southern Israel.

The Popular Resistance Committees claimed Saturday's rocket fire on Beersheva, while the armed wing of Hamas said it had fired four Grad rockets at Ofakim, lightly wounding two children.

It was the first time the Ezzedine al-Qassam Brigades had claimed any rocket fire since April when a truce was declared following a similar escalation in which 19 Palestinians died in air strikes after an anti-tank missile killed a youngster on an Israeli school bus.

But it made no mention of an end to the truce agreement of April 10 which was agreed to by the main militant factions.

Egypt also reported rocket fire hitting its territory on Sunday in what was believed to be an attempt by militants in southern Gaza to hit a nearby Israeli target, which strayed off target.

After the rocket fire, Israel arrested 120 Hamas members in the southern West Bank, Palestinian police said.

"Between 100 and 120 people have been arrested," Samira Halaika, a Hamas MP from Hebron told AFP. "In terms of size, there has never been such an arrest operation on this scale in the Hebron area before."

The military refused to comment on the operation, which sparked protests in the town of Dura where youths hurled stones at troops, who fired rubber bullets, moderately injuring one, medics said.

In Cairo, the Arab League was holding emergency talks about the escalation in the wake of the Negev attacks, which also sparked a diplomatic crisis between Israel and Egypt after troops accidentally killed five Egyptian policeman as they hunted for the gunmen.

Egyptian state television said Cairo was to recall its ambassador to Israel in protest, but Israel says it has not been officially notified of any such intention.

Defence Minister Ehud Barak on Saturday expressed "regret" over the killing but Cairo said it did not go far enough.

On Sunday, Jordan condemned Israel for its "military escalation and operations in Gaza that have killed civilians as well as Egyptian officers," urging an immediate halt to the strikes in order to avoid regional instability.