TEL AVIV-Israel's military said militants from Gaza fired at least 180 rockets and mortars into Israel, prompting it to launch a wave of overnight airstrikes and dimming the prospects of a long-term truce.
Gaza residents reported several Israeli airstrikes after the Palestinian rocket barrage.
More than 100 rockets have been fired into Israel since yesterday from the Gaza strip.
At least six Palestinians were reported injured by the Hamas-run health ministry.
Nickolay Mladenov, the United Nations envoy for the Middle East conflict who has been seeking to negotiate a long-term truce between Israel and Hamas, said he was "deeply alarmed" and called on all sides to "step back from the brink".
Earlier on Wednesday, before the rocket fire, a Hamas official said these negotiations were in "advanced stages".
The escalation comes after the Hamas leadership convened for a rare meeting in Gaza on Friday.
The warning/PSA came after a night that saw some of the heaviest rocket fire on Israel since 2014, but rather than slow things down, it seems to have had the opposite effect, with missile launches continuing, and reaching further into Israel.
Katz, meanwhile, proposed "shifting the full responsibility over the Gaza Strip to the worldwide community, while keeping Israel's security control on the port".
Israel has been battling large fires caused by kites and balloons rigged with incendiary devices or burning rags launched from Gaza that have destroyed forests, burned crops and killed wildlife and livestock.
"The joint factions command responded to the Israeli aggression", the source said, refering to the killing on Tuesday of two Hamas members.
It said Israel was targeted by around 150 rockets from late Wednesday into Thursday. Hamas said two of its fighters were killed after taking part in a gunfire parade inside a militant camp.
Their deaths come as violence continues to flare up between Israel and Gaza's rulers from the Islamic militant Hamas.
On Thursday, the IDF destroyed a five-story building allegedly housing Hamas' internal security service and offices of the group's senior officials.in response to a rocket fired at Beersheba, almost 40km from the border with Gaza.
The Palestinian government has issued a statement calling for immediate global intervention to stop Israel's aggression against the blockaded enclave.
The UN, he said, has engaged with Egypt in an "unprecedented effort" to avoid serious conflict, but warned that "the situation can rapidly deteriorate with devastating consequences for all people".
Clashes along the Gaza border since the end of March have seen at least 165 Palestinians killed by Israeli fire.
In exchange for any truce, Israel wants to recover the bodies of two soldiers killed in Gaza and gain freedom for two of its civilians who wandered into the enclave. Our strong commitment to the State of Israel's right to defend its borders and civilians is uncompromising. But it has come under heavy worldwide criticism for its frequent use of force against unarmed protesters.
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