Israeli military says troop reinforcements are being sent to the border with the Gaza Strip, raising the possibility of an expanded operation in the Palestinian territory in response to intensifying rocket fire.
Thursday's movement of tanks and artillery forces came after 11 Palestinians were wounded in Israeli air raids on Gaza, as Palestinians prepared for the funeral of a teenager who was killed in occupied East Jerusalem.
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The Gaza raids began as residents were preparing their pre-dawn Ramadan meal, known as suhoor, on Thursday.
"Eleven people were wounded during the night, including one who is in serious condition," a spokesman for the Gaza Health Authority said, adding seven were hurt in Beit Lahiya in the north and four in Gaza City.
The Israeli military said the air force struck 15 "terror sites" in Gaza. "The targets included weapons manufacturing sites as well as training facilities," a military spokesman said.
The raids came after at least 15 rockets struck southern Israel, two of which were intercepted by Israel's anti-missile system, the army said.
The rockets struck two houses in the southern border town of Sderot. Police said that one of the rockets caused a power cut. The Israeli army reported no injuries.
Israel's last major operation in Gaza, a territory controlled by the Palestinian group Hamas, took place in late 2012.
RELATED: East Jerusalem clashes follow teen's murder
The tensions have heightened following the abduction and killing of three Israeli settlers in the West Bank.
Israel has accused Hamas of being behind the deaths, and arrested about 600 suspected Hamas activists as part of a broad manhunt in the largest ground operation in the West Bank in nearly a decade.
The Palestinians have, for their part, accused Israelis of abducting and killing 17-year-old Mohammed Abu Khudair, a teenage boy, in East Jerusalem in a revenge attack, and stone-throwing youths clashed with Israeli police throughout the day on Wednesday.
Benjamin Netanyahu, the Israeli prime minister, on Thursday night once again condemned the killing of Khudair while addressing a Fourth of July function at the US ambassador's Jerusalem residence.
Al Jazeera's Stefanie Dekker, reporting from Jerusalem, said it appeared Netanyahu was attempting to calm the situation.
But in Gaza, concerns were growing about the tanks and troops assembling around the border, Al Jazeera's John Hendren said.
"They [Palestinians] also have heard that Israel has said if the rocket attacks coming out of Gaza do not stop within 48 hours, they will attack," Hendren reported.
The weeks since the young settlers disappeared have seen Palestinians in Gaza fire scores of rockets at Israel, which has responded with air strikes against alleged militant targets.
Two Palestinian fighters were killed in an air raid last week, and a young Palestinian girl was killed by an errant rocket attack. There have been no serious casualties on the Israeli side.
The armed wing of the Democratic Front for the Liberation of Palestine and the Al-Aqsa Martyr Brigades said in a statement that had they fired rockets.
They said they were "in response to the ongoing Israeli escalation against our people in Gaza and West Bank" - a reference to clashes in East Jerusalem after the murder of early on Wednesday.
According to figures from Dr Amin Abu Ghazali, the head of field operations for the Red Crescent in East Jerusalem, 232 people were wounded during the clashes, 178 of them in Shuafat alone.
The Palestinian president, Mahmoud Abbas, said it was clear that Abu Khdair was killed by Jewish settlers and called on Israel to bring the killers to justice.
An investigation into the disappearance and murder of the teenager was launched by Israeli police after Netanyahu demanded a swift probe into what he called a "reprehensible murder".
Khdair's family said he was abducted on Wednesday shortly before a charred body was found in a Jerusalem forest. Police were still attempting to identify the body on Thursday and a funeral was expected to be held after protests on Friday afternoon.
Al Jazeera's Dekker reported that the Israeli police were planning to deploy reinforcements to East Jerusalem on Friday.
With additional reporting from Fares Akram.