Israel has been hit with more than 60 missiles in 24 hours in a surge in violence from the Gaza Strip.
Three militants from the armed wing of Hamas, which rules in Gaza, were killed in an Israeli counter-attack.
Hamas has been trying to suppress attacks against Israel by al Qaeda-related Jihadist groups in recent weeks.
Israel moved military personnel and equipment from a joint exercise with US forces and some of its homeland defence soldiers from a drill based on the fiction of an earthquake, in case of further attacks.
Three migrant Thai workers were seriously injured in the mortar and rocket strikes from Gaza and a family home was hit.
A mosque was reported to have been struck by the Israeli Air Force. Eight people were wounded, as well as the three who were killed.
A statement from the Islamist movement Hamas said those killed were members of its military wing, the Ezzedine al-Qassam Brigades.
An Israeli army spokesman said the air force had attacked two groups of Palestinians who were about to fire rockets into southern Israel.
The raids came after the attack on an Israeli patrol that wounded a soldier was claimed by a leftist group, the Popular Front for the Liberation of Palestine.
Military officials were initially unsure what had caused the explosion, but eventually established it was "an explosive device".
Israeli Prime Minister Benjamin Netanyahu once again warned he would strike back at Gaza militants, which he said were supported by Tehran.
"Today we engaged in exchanges against terrorist aggression that comes from our southern border in Gaza, but it actually comes from Iran and a whole terror network that is supporting these attacks," he said.
"The way to fight terror is to fight terror, and that we shall do with great force."
Defence Minister Ehud Barak noted the explosive device was rigged to a gate on the fence, and said Israel takes the attack "very seriously".
The latest incidents came as the Emir of Qatar, Sheikh Hamad bin Khalifa Al-Thani, made a landmark visit to Gaza where he inaugurated a multi-million dollar project to rebuild the impoverished Palestinian territory.
But Israel's military remains reluctant to get involved in a ground incursion into the region.
Its last major operation there, Cast Lead, was widely condemned internationally for causing civilian deaths and for the use of white phosphorous explosives in urban areas.
Former head of Israel's National Security Council Ilan Mizrahi said: "It is a very delicate situation. We do not have a free hand like we did in the past.
"Now we have to consider our relationship with Egypt more carefully. I would expect Cairo will try to pacify the situation and we should be careful not to provoke the Egyptians.
"However, it will be impossible to allow this to continue for a long time."
The attacks follow a visit to Gaza by the Emir of Qatar, Sheikh Hamad bin Khalifa al-Thani, who pledged $400m (?250m) for a 3,000-home development in what appeared to be a major boost for the reputation of Hamas, which is struggling to balance its militant elements and instincts with its responsibilities as the administration.
Hamas spokesman Fawzi Hamad said: "We are seeing a dangerous escalation of Israeli actions. They are targeting us following the recent visit of the Emir of Qatar which took place successfully.
"They are targeting us to disrupt the atmosphere of the Eid holiday and to score political points ahead of the upcoming [Israeli] elections."
Following the violence, Israel closed schools in the areas close to the Gaza Strip - the first time that has happened since Operation Cast Lead.
Source: http://news.sky.com/story/1002043
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