The Israeli military has said it has conducted a "targeted" strike in the area of Beit Lahia in northern Gaza targeting an infrastructure site where weapons were stored.
The military said earlier that it had resumed enforcing the Gaza ceasefire agreement after a series of strikes across the enclave that it said was in response to Hamas violations.
Residents in Gaza City said they heard an explosion in northern Gaza and saw a column of smoke this afternoon.
Local authorities in Gaza reported that at least 100 people were killed in a series of strikes yesterday after Israel accused the militant group Hamas of violating the ceasefire, the latest violence in the three-week-old deal brokered by Mr Trump.
"At least 101 fatalities were brought to hospitals, including 35 children and a number of women and elderly, as a result of Israeli air strikes in less than 12 hours," said Mahmud Bassal, spokesman for Gaza's civil defence agency, which operates as a rescue force under Hamas authority.
"The Israeli strikes targeted tents for displaced people, homes and the vicinity of a hospital in the Strip," Mr Bassal said.
Israel began carrying out air strikes yesterday after accusing Hamas of attacking its troops in Gaza and violating the truce.
Watch: Trump says Gaza ceasefire holds, Israel has right to hit back if attacked
"As I understand it, they took out an Israeli soldier," Mr Trump told reporters on board Air Force One. "So the Israelis hit back and they should hit back. When that happens, they should hit back," he added.
"Nothing is going to jeopardise" the ceasefire, Mr Trump said. "You have to understand Hamas is a very small part of peace in the Middle East, and they have to behave."
The Israeli strikes continued into this morning across Gaza, according to witnesses.
An Israeli military official said Hamas had violated the ceasefire by carrying out an attack against Israeli forces in an Israeli-controlled area of the enclave.
"This is yet another blatant violation of the ceasefire," the official said.
The US-backed ceasefire agreement went into effect on 10 October, halting two years of war triggered by deadly Hamas-led attacks on Israel on 7 October 2023.
Both sides have accused each other of ceasefire violations.
"If they (Hamas) are good, they are going to be happy and if they are not good, they are going to be terminated, their lives will be terminated," Mr Trump said.
"Nobody knows what happened to the Israeli soldier but they say it was sniper fire. And it was retribution for that, and I think they have a right to do that."
Earlier yesterday, Israeli media reported an exchange of fire between Israeli forces and Hamas fighters in the southern Gaza city of Rafah.
Hamas denied responsibility for an attack on Israeli forces in Rafah. The group also said in a statement that it remained committed to the ceasefire deal in Gaza.
Yesterday's strikes on Gaza City followed what Israel called a "targeted strike" on Saturday on a person in central Gaza who it said was planning to attack Israeli troops.
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Hamas had announced it would hand over the body of another hostage yesterday as demanded by Israel under the ceasefire deal.
Israel accuses Hamas of reneging by not returning the bodies, but the group says it will take time to locate the remains amid Gaza's war-ravaged ruins.
Hamas later said it would delay the handover, adding that Israeli "escalation will hinder the search, excavation, and recovery of the bodies".
In a further statement on Telegram, Hamas's armed wing said it had found the bodies of two hostages.
It did not say when it would hand them over.
'We want to rest'
Hamas had come under mounting pressure after it returned on Monday partial remains of a previously recovered captive, which Israel said was a breach of the truce.
Hamas had said the remains were the 16th of 28 hostage bodies it had agreed to return under the ceasefire deal.
But Israeli forensic examination determined Hamas had in fact handed over partial remains of a hostage whose body had already been brought back to Israel around two years ago, according to Mr Netanyahu's office.
Israeli government spokeswoman Shosh Bedrosian accused Hamas of staging the discovery of the remains.
"I can confirm to you today that Hamas dug a hole in the ground yesterday, placed the partial remains... inside of it, covered it back up with dirt, and handed it over to the Red Cross," she told journalists.
The Hostages and Missing Families Forum urged the government to "act decisively against these violations" and accused Hamas of knowing the location of the missing hostages.
Hamas spokesman Hazem Qassem rejected claims the group knows where the remaining bodies are, arguing that Israel's bombardment during the two-year war had left locations unrecognisable.
'Third set of remains'
"The movement is determined to hand over the bodies of the Israeli captives as soon as possible once they are located," he said.
Hamas has already returned all 20 living hostages as agreed in the ceasefire deal.
Hamas's October 2023 attack resulted in the deaths of 1,221 people on the Israeli side, most of them civilians, according to an AFP tally based on official Israeli figures.
Israel's subsequent assault on Gaza killed at least 68,531 people, according to figures from the Hamas-run territory's health ministry that the UN considers reliable.
Despite the ceasefire, the toll has continued to climb as more bodies are found under the rubble.
