GAZA: Israel said it struck targets in the Gaza Strip on Monday after Palestinian militants fired rockets at southern Israel in what they said was a response to an Israel air strike on Sunday that wounded two militants and eight bystanders.

The army said it had targeted "Hamas terror activity sites and terrorist squads responsible for the rocket fire", but gave no details.

Gaza hospital officials said one Islamic Jihad militant thought to have been involved in the rocket attack had been wounded by Israeli tank fire east of the town of Rafah.

Residents of the town of Khan Younis in the southern Gaza Strip said an Israeli tank fired at the suspected launch area, slightly wounding four children and damaging a mosque minaret and a water tower.

The Israeli army says 470 rockets have been fired from Gaza this year, 10 in October alone.

The armed wing of Hamas, the Palestinian Islamist faction which controls the Gaza Strip, said it had carried out the latest rocket attack with the militant Islamic Jihad group.

It was the first time since June that Hamas had acknowledged launching rockets at Israel.

An Israeli military spokeswoman said some rockets had landed harmlessly near the border with the Gaza Strip.

Sunday's air strike was aimed at two Palestinian militants, one of whom was critically wounded, as was one of the bystanders.