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Israel's army bombed the Gaza Strip on Wednesday and Palestinian resistance groups retaliated, as Egyptian mediation efforts sought to end the violence which has killed 22 Palestinians in two days.

It was the worst Israeli attack on the besieged Palestinian coastal enclave in months.

Smoke billowed from the densely populated Palestinian territory after Israel claimed it was targeting rocket launch sites of the Palestinian Islamic Jihad movement (PIJ).

Gaza's health ministry said seven people were killed, a day after Israeli strikes on the Palestinian territory left 15 dead.

In Israel, sirens wailed in the Tel Aviv area warning of incoming Palestinian rocket fire, an AFP journalist reported, and in towns close to the border.

In a joint statement Palestinian factions said "hundreds of rockets" were fired, while the Israeli army reported 270 launches from Gaza.

🚨 Intense rocket barrages from the Gaza Strip now.

Sirens sound in the vicinity of Tel Aviv

— Middle East Observer (@MEO_Analysis)

فرحة أهالي غزة لحظة إطلاق الصواريخ بإتجاه أراضينا المحتلة.. 💚🖤

— الشايِب 𓂆 (@Al_Shayeb21)

Four of those killed Wednesday were fighters with the Popular Front for the Liberation of Palestine, the group said in a statement.

The fatalities also included a 10-year-old girl, whose body was seen by an AFP journalist in Gaza City's Shifa hospital.

Prime Minister Benjamin Netanyahu said Israel was "ready for the possibility of an expanded campaign and harsh strikes against Gaza," in a meeting with local leaders near the coastal territory.

Israel's Magen David Adom emergency service said it had received no immediate reports of casualties.

Israel's Iron Dome air defence system intercepted rockets above the coastal city of Ashkelon and elsewhere in the south, AFP photographers witnessed.

The latest violence comes a day after Israeli strikes on Gaza killed three top Islamic Jihad leaders and 12 others, including four children, according to a health ministry toll.

'Tension and fear'

Islamic Jihad had vowed Tuesday to retaliate to Israel's deadly strikes on the territory, with Israel warning its residents near the border to stay near bomb shelters.

Ahead of Wednesday's exchange of fire, Gaza's usually bustling shops were closed.

رشقات صاروخية من غزة تجاه فلسطين المحتلة 🇵🇸

— غزة الآن - Gaza Now (@GazaNownews)

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This is the Gaza's situation right now.
The bombings in many several places by the occupation warplanes.🔥🇵🇸💔

— Islam Essa🇵🇸#Gaza🙋‍♀️👑 (@IslamEssa_Gaza)

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People in Gaza "expect the worst," said resident Monther Abdullah.

"Everyone feels anxious and people aren't on the street much. I definitely feel like there's a war coming," the 50-year-old told AFP.

The latest violence comes on the second anniversary of a devastating 11-day bombing campaign by Israel on Gaza.

Hamas spokesman Abdul Latif al-Qanou said Wednesday "the strikes of the unified resistance are part of the process of responding to the massacre committed by (Israel)."

West Bank deaths

Among those killed Tuesday were four children and three senior Islamic Jihad operatives.

The fighters were named as Jihad Ghannam, Khalil al-Bahtini and Tareq Ezzedine.

استشهاد 3 من قادة سرايا القدس الجناح العسكري لحركة الجهاد الإسلامي في بقصف طيران الاحتلال الإسرائيلي على القطاع.
ونقل مصدر في الجهاد الإسلامي أن القادة الثلاثة هم جهاد غنام، وخليل البهتيني، وطارق عزالدين.

— براق المنبهي (@brrag_almunbahy)

Earlier Wednesday, Israeli troops raided the West Bank town of Qabatiya, killing two people.

The Palestinian health ministry identified the two men as Ahmed Jamal Tawfiq Assaf, 19, and Rani Walid Ahmed Qatanat, 24.

صورة| شهيدا
أحمد جمال توفيق عساف(19 عامًا)، و راني وليد أحمد قطنات (24 عامًا).

— وكالة سند للأنباء - Snd News Agency (@snadps)

The Israeli military said troops detained one person during the raid.

Mourners later carried the two men's bodies through the streets in a funeral procession.

Israel has occupied the West Bank in violation of international law since the 1967 Arab-Israeli war and its forces frequently launch deadly raids on Palestinian towns and cities.

At least 132 Palestinians have been killed by Israeli troops and settlers since the beginning of the year.

'Barbaric' strikes

The Arab League on Wednesday condemned the "aggressive (and) barbaric Israeli raids on the Gaza Strip, which targeted civilians, children and women in residential neighbourhoods".

The Gaza violence this week is the worst since a three-day escalation in August killed 49 Palestinians, with no Israeli fatalities.

Hamas chief Ismail Haniyeh spoke Wednesday to Qatar, Egypt and the United Nations, key mediators in Gaza, his spokesman Taher al-Nunu said.

The Israeli foreign minister said his government was studying an Egyptian-mediation proposal.

While Hamas has fought multiple wars with Israel in recent years, the group stayed on the sidelines of last year's conflict fought between Israel and Islamic Jihad.