Palestinian militants responded with heavy fire on southern Israel, launching almost 400 mortar rounds and rockets that wounded 27 people and killed one - a Palestinian living in southern Israel.
But it did not address the deeper issues that pushed Israel and Gaza's Hamas rulers towards their latest violence and left doubts about worldwide efforts to forge a broader truce agreement.
Israeli Prime Minister Benjamin Netanyahu defended the move, saying he wanted to avoid war if it was not necessary.
Hamas, in turn, had scaled back its mass protests that have led to weekly bloodshed along the Israeli border.
Hamas said it was retaliating for a botched Israeli commando raid in Gaza that killed one of its commanders and six others on Sunday.More news: Secret North Korean missile sites located?
The southern Israeli city of Ashkelon is just eight miles from Gaza, making it an easy target.
Speaking to the news site, Fakhro said: "The Israeli occupation continues its efforts to get rid of the Palestinians in the remaining parts of their occupied land", stating that Israel occupied 85 per cent of the historical Palestine, leaving "only 15 per cent for 14 million Palestinians".
Palestinian groups including Hamas say they have accepted an Egyptian mediated ceasefire to end the violence.
Hamas, which has governed the packed and impoverished coastal enclave since 2007, claimed victory.
Spokesman Abdel-Latif Al-Qanoua said the militants had "taught the enemy a harsh lesson and made it pay for its crimes".
Seven Palestinians were killed in Gaza over the course of some 24 hours as Israeli strikes targeted militants and flattened buildings while sending fireballs and plumes of smoke into the sky.More news: Jada Pinkett Smith's Mother Admits She Didn't Like Her Daughter's White Boyfriend
Shops reopened and cars jammed the streets.
Meanwhile, in the rocket-battered town of Sderot in Israel, dozens of protesters chanted "Disgrace!" at what they saw as their government's capitulation to militant violence.
The military said it struck some 160 targets in the Gaza Strip.
Israel and Egypt immediately imposed a blockade on Gaza to contain Hamas.
"Either we come to a settlement or there's an all-out campaign".
Egypt has negotiated ceasefires following previous flare-ups, while UN Middle East envoy Nickolay Mladenov has also been seeking a long-term truce between the two sides in recent weeks.More news: Pound soars after U.K., European Union agree on text for Brexit deal
The clash that resulted from the blown covert operation killed seven Palestinian militants, including a local Hamas military commander, as well as an Israeli army officer.