Eleven Palestinians, most of them fighters, were killed and around 15 wounded in a series of Israeli air strikes on the Gaza Strip, according to Palestinian medics.
The Israeli raids came as Palestinians fired dozens of rockets and mortar rounds into the Eshkol region of southern Israel, wounding four people, one seriously, Israeli military sources said on Saturday.
One Israeli strike, on a car travelling in the Tel El-Hawa neighbourhood west of Gaza City, killed the head of the militant Popular Resistance Committees, Zohair al-Qaisi, and fellow member Mahmud Hanani, the group said.
Both the PRC and the military wing of Hamas threatened to retaliate for Qaisi's death, and around 40 rockets and shells were subsequently fired on southern Israel.
The Al Quds Brigades, the military arm of Islamic Jihad, said later that strikes on the east side of Gaza City and then on the city centre had killed nine of its members.
Around 15 Gaza citizens were wounded in the Israeli raids, emergency services said.
The Israeli attacks came in response to Palestinian mortar and rocket fire which started on Friday morning. The Israeli military said that in the course of the day about 40 rockets and mortar rounds had landed in southern Israel.
The PRC and the Al-Aqsa Martyrs Brigades, an armed offshoot of Palestinian president Mahmud Abbas's Fatah movement, issued statements claiming to have fired rockets into Israel on Friday.
The official Palestinian WAFA news agency quoted a statement by the Fatah-dominated Palestinian Authority condemning the Israeli retaliation, saying it had created a "negative environment" that would "escalate the circle of violence in the region."
The Israeli military said Qaisi "was among the leaders who planned, funded and directed" a deadly cross-border attack into southern Israel from Egypt's Sinai last August.
In that incident, gunmen carried out a coordinated series of shooting ambushes on buses and cars on Route 12, which runs along the Egyptian border 20 kilometres (12 miles) north of the Red Sea resort of Eilat.
The shootings took place over several hours, leaving eight dead and more than 25 wounded.
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The military statement said Qaisi was also involved in a 2008 attack on a terminal for pumping fuel from Israel into the Gaza Strip, in which two Israeli civilians were killed.
The statement added that both the dead men were "responsible for planning a combined terror attack that was to take place via Sinai in the coming days."
It said that other strikes were aimed at men about to fire rockets into Israel.
Hamas, which rules the Gaza Strip, has maintained a tacit truce with Israel, but other armed Palestinian groups regularly fire rockets and mortars across the border, which can spark air strikes in response.
The relatively small Popular Resistance Committees is one of the most active, and it pledged to avenge its men's deaths.
"We are not committed to the truce; we will respond very strongly to this (Israeli) crime," Abu Ataya, a spokesman for the PRC's military wing, the Al-Nasser Salahadin Brigades, told AFP.
Hamas's military wing, the Ezzedine al-Qassam Brigades, also warned of retribution.
"Al-Qassam Brigades mourns the martyr leader Zohair Qaisi and martyr Mahmud Hanani and confirms that their blood will not be wasted, the enemy's crime will be a curse on him," it said in a statement.
Its political leaders were more restrained.
"The recent Zionist escalation is an unjustified crime, it comes as a part of the destabilisation of a stable security situation in the Gaza Strip" the Hamas-run Gaza government's interior ministry said in a statement.
"We hold the international community fully responsible for the attacks."
Before Friday's air strikes, Israeli army radio quoted what it called "senior military sources" as saying the army "does not intend to allow the firing to continue."