Smoke billowed from the densely populated coastal enclave after Israel launched fresh attacks on Gaza.
Gaza’s Health Ministry said seven people were killed, a day after Israeli strikes on the Palestinian territory left 15 dead, AFP reported.
In a joint statement Palestinian resistance groups said hundreds of rockets were fired, while the Israeli army reported 270 launches from Gaza.
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.
Israeli 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 Iron Dome air defence system intercepted rockets above the coastal city of Ashkelon and elsewhere in the south.
The latest violence comes a day after Israeli strikes on Gaza killed three top Islamic Jihad commanders and 12 others, including four children, according to a health ministry toll.
Islamic Jihad had vowed Tuesday to retaliate, with Israel warning its residents near the Palestinian territory to stay near bomb shelters.
The latest violence comes on the second anniversary of a devastating 11-day war fought between Gaza fighters and Israel.
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).”
Earlier Wednesday, Israeli troops also raided the West Bank town of Qabatiya, killing two Palestinians.
The Palestinian Health Ministry identified the two men as Ahmed Jamal Tawfiq Assaf, 19, and Rani Walid Ahmed Qatanat, 24.
The Israeli military said troops detained one person during the raid.
Israel has occupied the West Bank since the Six-Day War of 1967 and its forces regularly operate in Palestinian cities.
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.