Palestinian have fired a Katyusha-style rocket at Israel from Gaza for the first time, the Israeli army said.
A Bedouin Arab shepherd and his son were killed near Gaza
One of the rockets, which are bigger than the makeshift Qassam missiles militants usually launch, fell near a kibbutz in southern Israel.
There was no damage or casualties reported at the Itfah kibbutz.
Earlier in the day, as Israel voted in a general election, two Arab Israeli shepherds were killed in a blast caused by an unexploded shell in a field.
Katyushas, a favoured weapon of the Lebanese Shia militant group Hezbollah, have a range several times greater than Qassams, which have caused few Israeli casualties in hundreds of salvoes.
An Israeli TV commentator said their deployment would be a "dramatic development", which Israel's military had long feared.
The Israeli town of Ashkelon - with more than 100,000 inhabitants and the site of important desalination and power facilities - lies within striking distance of Katyusha rockets.
The Arab shepherds - a father and his teenage son - died on Tuesday morning in a blast near Nahal Oz farming community just a few hundred metres east of the Gaza Strip.
The Islamic Jihad militant group claimed responsibility for the blast saying it had timed a rocket attack to disrupt the election in Israel.
The Israeli army said the explosion might have been caused by a rocket that had lain dormant for some time.
However, the army did confirm that three rockets had been fired from Gaza during the day.
The dead were Bedouin Arabs, who make up about 10% of Israel's Arab community, which itself represents about one-fifth of Israel's total population.
In other violence, Israeli troops killed one Palestinian militant in a raid in the West Bank.
Samer Freihat, 24, was hit by an Israeli bullet after clashes broke out in the village of Yamun, near Jenin, Palestinian medics said.
Palestinian radio said he was shot several times and left to bleed for several hours before he died.
An Israeli army spokesman said troops had opened fire after seeing Freihat was armed, adding that he had been on a list of wanted militants.