Palestinian militant group Hamas says it has fired rockets at Israel for the first time since its truce 16 months ago, in response to civilian deaths.
Palestinian PM Ismail Haniya visited the wounded in hospital
Hamas accuses Israel of killing seven civilians, three of them children, who were caught in an explosion as they relaxed on a Gaza beach on Friday
Israel, which has been using artillery against suspected Gaza rocket squads, promised to investigate the deaths.
There were no immediate Israeli reports of damage from the Hamas rockets.
Hamas's armed wing, Izzedine al-Qassam Brigade, said it had fired rockets into Israel from the Gaza Strip.
"This is only the start and rocket firings will continue," a spokesman was quoted by Reuters news agency as saying.
"Next time, the rockets will be longer in range and they will hit places deeper inside the Zionist entity."
The spokesman said the attacks were a response to Israeli "crimes and the killings of civilians in Gaza".
The head of the United Nations has called for a full inquiry into Friday's deaths.
'Right to fight'
Hamas government spokesman Ghazi Hamad told the BBC that Friday's deaths had changed what he called "the rules of the game", and that suicide attacks could resume.
Sandals and seaside toys lay at the scene of the beach deaths
"You can expect anything from what happened in Gaza," he told Radio Four's Today programme.
Hamas's armed wing has been distributing leaflets declaring the end of the February 2005 truce and appearing to promise a resumption of bomb attacks on Israeli towns.
"The earthquake in the Zionist towns will start again and the aggressors will have no choice but to prepare their coffins or their luggage," the leaflets read.
The Israeli army says it detected at least three rocket launches but has no record of the rockets landing in Israel or causing any damage.
For now this move by Hamas seems mainly symbolic, the BBC's Simon Wilson reports from Jerusalem.
Under the ceasefire arrangement agreed with Palestinian Authority President Mahmoud Abbas, Hamas has enjoyed enormous political success, taking power with a landslide victory in parliamentary elections in January.
So far this does not amount to a complete change in Hamas's position but if it were to return to widespread militant activity, the question would be how Israel might respond, our correspondent adds.
In the past it has refused to differentiate between political and armed wings, assassinating a number of Hamas leaders, including its wheelchair-bound founder, Sheikh Ahmed Yassin.
UN Secretary General Kofi Annan's spokesman said the UN chief was deeply disturbed by the killings.
A senior Israeli military officer, Maj-Gen Yoav Galant, said it was too early to be certain about the cause of Friday's explosion.
"This may have been an accident which caused an artillery shell to fall off course, or an older unexploded shell which went off, or perhaps an explosive device which was tinkered with," he said.
Mr Abbas declared three days of Palestinian mourning following the deaths, which included five people from the same family, a man and one of his wives and three of his children.
They were having a picnic on the beach when the explosion happened. The children's seven-year-old sister had been swimming in the sea at the time and survived. Twenty people were wounded.