Israel has killed a member of Islamic militant group Hamas and wounded about 30 other Palestinians in two helicopter missile attacks on Gaza City.
Many bystanders were hurt
In the first attack, witnesses said missiles struck a car, killing 26-year-old Fuad al-Lidawi.
Israeli military sources said the car contained a Hamas cell that had been preparing a rocket attack on Israel.
Several children were among the injured.
In the second attack, helicopter gunships targeted what military sources described as a weapons warehouse but what Palestinian reports said was the home of a suspected Hamas member.
There were no reports of casualties in what was the seventh Israeli missile attack on suspected Hamas members this week.
The Israeli Government has vowed to destroy Hamas following Wednesday's suicide bombing that killed 16 people in an attack on a bus in Jerusalem.
"As a government responsible for the security of its citizens, we must wage a war to the bitter end because no one else, at least at this stage, will do it," Israeli Deputy Defence Minister Zeev Boim told army radio.
But the militants have warned foreigners to leave Israeli soil and pledged to bomb the Jewish state into "rubble".
The first of the Israeli helicopter gunships went into action soon after nightfall on Friday, striking Gaza City's Sabra neighbourhood.
The street was crowded with worshippers walking to a nearby mosque for evening prayers.
Israel has vowed to destroy Hamas
Three missiles reportedly hit the car near the home of Hamas spiritual leader Sheikh Ahmed Yassin.
Angry Palestinians gathered around the smouldering wreckage as ambulances rushed to take the wounded to hospital.
Fuad al-Lidawi was not a senior member of Hamas' military wing, a BBC reporter in Gaza says.
But he was said to have been an assistant to Tito Massoud, another Hamas militant killed in an Israeli missile strike earlier in the week.
In the second attack, Palestinian witnesses said at least two missiles were fired.
In a separate incident, Palestinian militants - reportedly from the al-Aqsa Martyrs' Brigade - shot dead an Israeli in the West Bank town of Jenin.
Late on Friday, Palestinian leader Yasser Arafat met his senior ministers in Ramallah - a meeting one source said was called to discuss a way out of the worsening violence.
Since Monday, nearly 50 people have been killed in Israel and the Palestinian territories.
The BBC's Jonny Dymond in Jerusalem says there is speculation about a ceasefire proposal, but there is no confirmed offer yet.
Earlier, US Secretary of State Colin Powell called on Israel to exercise restraint in its response to Palestinian attacks.
The violence has put under severe strain US President George W Bush's plan for Middle East peace - known as the roadmap.
Mr Bush is planning to send a veteran diplomat to Israel this weekend to try to curb the violence.
United Nations Secretary General Kofi Annan has said peacekeepers should be sent to the Middle East to try to break the accelerating cycle of violence there.
Mr Annan said a force of 51 American monitors due to arrive next week "was a beginning", but only an armed "buffer" force would be able to halt the escalation of violence.
However, White House spokesman Ari Fleischer said the US would not send its soldiers to the area.
"The parties themselves, working with the Arab nations, have to find a way to co-operate to fight terror, without putting American forces in an area where they will become targets," Mr Fleischer said.