"There was an attempt in Gaza to intercept an [Islamic Jihad] activist yesterday. It was unsuccessful," Public Security Minister Gideon Ezra said on Army Radio on Wednesday, without naming the fighter.
"Any means to neutralise the organisation are relevant and possible," he said.
Ezra said "an opportunity had presented itself" and Israel targeted the fighter while Israeli Prime Minister Ariel Sharon and Palestinian President Mahmoud Abbas were meeting in Jerusalem on Tuesday.
In the northern Gaza town of Bait Lahya, residents pointed to a damaged structure and a crater with metal fragments that they said came from an Israeli missile launched from an aircraft.
End of truce
Sharon had suspended what Israel calls targeted killings after declaring a truce with Abbas four months ago but complained at their summit on Tuesday that the Palestinian leader was not doing enough to rein in armed men.
"Israel tries to disturb the Palestinian internal unity by targeting a certain faction"
Islamic Jihad member
Islamic Jihad has been carrying out mortar bomb and rocket attacks against Jewish settlements in the Gaza Strip and a town in southern Israel in what it calls a response to Israeli raids against its members.
"The attempt yesterday to kill an Islamic Jihad leader in Gaza signalled the resumption of the targeted killing policy," an Israeli security source said.
Ezra added "the war against any organisation acting against us would continue as long as the Palestinian Authority" failed to crack down on fighters.
Khidr Habib, a member from Islamic Jihad's political arm, told Aljazeera the Israeli comments were merely threats and Islamic Jihad would defend Palestinians "whatever the costs and sacrifices may be".
"We expect such announcements from Israel whose threats have not stopped yet," Habib said.
"Islamic Jihad has committed to calm and that can be seen on the ground while Israel continues violations, assaults and crimes against our people," he added.
Habib said Erez was specifically singling out Islamic Jihad in its attack as part of an Israeli policy to create a split among Palestinian groups.
"Israel tries to disturb the Palestinian internal unity by targeting a certain faction," he said.
White House reaction
The White House on Wednesday declined to criticise Israel for resuming its assassination policy and called on the Palestinian leadership to do more to combat "terrorist" groups.
"There are terrorist organisations in the region that are determined to derail efforts toward the president's two-state vision," White House spokesman Scott McClellan told reporters.
"They need to be dismantled. There is more that the Palestinian leadership can do to go after those who engage in violence and terrorist activity, and we encourage them to do more."