Violence has flared up in the Gaza Strip, with Israeli forces targeting Palestinian militants and Palestinians launching mortar attacks.
Israeli forces have been gathering on the border with Gaza
In the latest strike, Israelis launched two missiles on a car in Beit Lahia, injuring a bystander, say witnesses.
Earlier, troops killed a local Hamas commander in Gaza. Palestinians fired mortars at the Jewish settlement of Neve Dekalim, injuring two people.
Each side has blamed the other for the collapse of a months-long truce.
Israel has threatened to launch a ground offensive to stop Palestinian attacks.
Israel's Deputy Defence Minister Zeev Boim said Israel had lost faith in Palestinian leader Mahmoud Abbas, who has condemned recent Palestinian militant attacks.
Surge in attacks
Israeli has been amassing its forces in preparation for what could be large-scale incursions into Palestinian towns.
Israel resumed targeting militants a few days ago after a suicide bombing and a sharp increase in the number of missile attacks launched by Palestinian militants.
Israeli air strikes on Friday killed five Palestinians, four of them Hamas militants.
The latest shooting took place in Khan Yunis.
Saeed Seyam, a local paramilitary commander, was killed close to his home by a shot to the neck, witnesses say.
Palestinian security forces say he was targeted by an Israeli sniper operating in a nearby settlement.
Later on Sunday, a Palestinian man was shot dead as he approached the Jewish settlement of Netzarim, just south of Gaza City, an Israeli army spokesman said.
Israeli Prime Minister Ariel Sharon has promised a "strong and harsh" response to the return of attacks on Israelis.
Hanan Ashrawi, from the Palestinian Legislative Council, told the BBC that any such action on the part of the Israelis would be dangerous and irresponsible.
"The consequences could be disastrous for everybody, not just for the Palestinians but for Israel and for any prospects of peace in the region," she said.
"This reinstates again the language of occupation of militarism, of unilateralism, of violence."
Mr Abbas has blamed Israel for effectively undermining the ceasefire, but warned Palestinian groups that he would not tolerate renewed infighting or new attacks against Israel.
US pullout fears
In earlier attacks, two rockets were fired by Palestinians from the Gaza Strip into southern Israel on Sunday without hurting anybody or causing damage, an Israeli spokesman said.
The fresh violence began with a series of Palestinian rocket attacks on an Israeli town, in which one woman died, and a suicide bombing that killed six Israelis - the first in four months.
US Secretary of State Condoleezza Rice will visit the region next week to urge an end to the new upsurge in violence.
Ms Rice added the stop onto a planned trip to Africa after the breakdown of the ceasefire, agreed in February.
It will be her third to Israel and the Palestinian territories in the space of five months.