Israeli soldiers are briefed at a staging area on the northern Israel-Gaza border. (AP)
The Islamic Jihad movement planned a rally in Gaza City to commemorate the start of Israel's "Operation Cast Lead," while the Hamas-run television channel Al-Aqsa devoted its programming to the 22-day invasion.
The anniversary comes after weeks of mortar shell and rocket fire from Gaza and retaliatory Israeli air strikes. Both sides have ramped up their rhetoric, warning an escalation in violence could result in a full-blown conflict. On Sunday, a spokesman for Islamic Jihad said the group was prepared for a new war with Israel.
"The occupation will pay the price if they even think of carrying out an escalation in the Gaza Strip," Abu Ahmed told mourners at the funerals of two Islamic Jihad members killed in a Sunday exchange of fire with Israeli troops.
A day earlier, members of Hamas's military wing held a press conference and also announced their readiness for war.
Israeli officials have warned that continued rocket fire will not be tolerated, after at least 23 mortar rounds and six rockets were fired from Gaza since December 19, including one that struck a kibbutz, landing near a kindergarten and wounding a teenage girl.
"I hope there is no need for another operation like Cast Lead," Israel's Deputy Prime Minister Silvan Shalom told public radio on Sunday. "But if this situation continues -- if missiles keep being smuggled in without hindrance, if they continue shooting into Israel, trying to hit innocent civilians -- then, obviously we will have to respond and respond with all our force."
Despite the rhetoric, analysts said Gaza's Hamas rulers and Israel had no real desire for a new conflict.
Hamas "does not want a confrontation at this stage. It is doing everything to prevent the situation from degenerating," Amos Gilad, a senior defence ministry official, said on Israeli television. He said Hamas wanted "to maintain the ceasefire so as to be better prepared for any Israeli offensive."
And Mukhaimer Abu Saada, a professor of political science at Gaza's Al-Azhar University, said he believed neither side was angling for war. "I don't think Israel wants open war with the Gaza Strip ... and it wants to maintain calm on the ground," he told AFP.
"I think what is happening is psychological warfare and threats designed to reinforce the truce and force Hamas to stop the rocket attacks from Gaza," the professor said. He said Hamas was flexing its muscles by allowing some rocket fire into Israel, but was largely committed to maintaining the truce.
"Hamas wants to send Israel a message by ignoring the rocket and missile fire from Gaza that it is able to retaliate against Israel if it chooses, but at the same time, it does want calm on the ground and is committed to it."
Israel launched Operation Cast Lead on December 27, 2008 in response to hundreds of rockets fired into the Jewish state. The war, which ended in a ceasefire on January 18, 2009, killed 1,400 Palestinians, mostly civilians, and 13 Israelis, 10 of them soldiers.