An Israeli airstrike has destroyed a Hamas security forces compound in central Gaza City after threatening to step up attacks in response to missiles being fired into the town of Sderot.
At least two people were reportedly killed and more than 20 wounded, a Hamas Executive Force spokesman said.
Nour Odeh, Al Jazeera's correspondent in Gaza, said an F16 fighter jet decimated the building belonging to Hamas's Executive Force.
At least two Israelis have been injured in rocket attacks on the southern Israeli town on Thursday.
Miri Eisin, a spokeswoman for the Israeli prime minister, said before the airstrike: "We have had enough. Israel will take all defensive measures to protect our citizens from these Hamas rockets."
Factional fighting
The attack came shortly after Mahmoud Abbas, the Palestinian president, cancelled a visit to Gaza for talks on the ceasefire between political factions in the territory.
Abbas had been due to travel to Gaza to meet Ismail Haniya, the Palestinian prime minister.
Meanwhile, a truce agreed between Hamas and Fatah - their fourth in as many days - was generally holding despite some sporadic violence.
At least one Palestinian was killed an 11 injured in factional fighting in Rafah.
Fatah said at least five of its men were also abducted by its rival group. Hamas said a member had been critically wounded in an early morning shooting.
The clashes have shaken the two-month-old Palestinian unity cabinet and raised fears of a full-blown civil war and sparked international concern.
Three previous ceasefires collapsed within hours since the violence first flared on Sunday.
Haniya's home attacked
Overnight, unknown gunmen opened fire on Haniya's home in Gaza, his office said.
His bodyguards returned fire and the gunmen ran off. Nobody was injured.
The bloodshed has sent terrified Gaza residents cowering indoors, adding to the chaos in the territory already reeling from an economic aid boycott imposed after Hamas first came to power last year.
The fighting has also threatened to torpedo recent efforts to revive Middle East peace talks that have been stalled for six years.
Forty-three people, the vast majority of them Fatah loyalists, have been killed since Sunday. The toll has included two civilians, with more than 100 people wounded.
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