The Israeli Prime Minister has said his country's military has delivered the "harshest blow" in years to Gaza militants.
Benjamin Netanyahu made his first comments after the worst military flare-up since the 2014 war.
"Since yesterday, the army has responded forcefully to fire from the Gaza Strip with attacks against dozens of targets of terrorist organisations in the harshest blow that we have dealt them in years," Mr Netanyahu said.
"Those who are responsible for the escalation with the encouragement of Iran are the Hamas regime, Islamic Jihad and other terrorist organisations," he added, referring to support Iran gives the two groups.
Islamic Jihad is the second most-powerful armed group in Gaza after Hamas, which runs the Palestinian enclave.
Calm returned to the Gaza Strip and nearby Israeli communities today after the exchange of fire yesterday that stretched into the night.
It began with a barrage of mortar fire from the Gaza Strip into Israel, resulting in a heavy Israeli response.
Israel said it targeted some 65 militant sites in the Gaza Strip.
It also said that around 100 rockets and mortars fired from Gaza either exploded in Israel or were intercepted by air defences.
Three Israeli soldiers were wounded. No casualties were reported in Gaza.
The border is quiet after Hamas announced early today that it would cease fire if Israel did the same.
Israel signalled it would halt its strikes if the rocket barrages stopped.
A Palestinian official said Egyptian mediation led to the ceasefire, and terms of the "understanding" did not go beyond "a restoration of calm by both sides".
Hamas had largely abided by an Egyptian-brokered truce that ended the seven-week Gaza war four years ago.
The UN Security Council is to meet today to discuss the rocket strikes on Israel, following a request by the United States for an urgent meeting, which wants the body to condemn the attacks.
"The Security Council should be outraged and respond to this latest bout of violence directed at innocent Israeli civilians," US ambassador Nikki Haley said.
Israel 'approves almost 2,000 new West Bank settler homes'
Israel has approved construction of 1,958 new settler homes in the occupied West Bank, Israeli settlement watchdog Peace Now has said.
It is fewer than the 2,500 for which Defence Minister Avigdor Lieberman said last week that he intended to seek approval.
It is the first tranche of settlement approvals since the controversial US embassy transfer from Tel Aviv to Jerusalem on 14 May, a move that infuriated Palestinians and intensified protests on the Gaza border, with at least 61 Palestinians killed in clashes with Israeli forces that day.
Peace Now said that, in today's batch, around 700 units got final approval while the remainder passed the first approval stage in the planning process.
It said the majority are in isolated settlements outside the major "blocs" which the government will seek to retain in any future peace agreement with the Palestinians.
Israel's West Bank settlements are considered illegal under international law and are bitterly opposed by Palestinians.
Peace Now said in a statement that there had been a leap in settlement-building during US President Donald Trump's term so far, with about 14,000 approvals.
This, it added, "is more than three times the amount that was approved in the year and a half before his inauguration (4,476 units)."
