Gaza City - Four Israeli soldiers were wounded and five Palestinians, including a militant, were killed Saturday as the two sides traded fire.
An anti-tank missile was fired at an Israel Defense Force patrol, wounding the soldiers, according to the IDF, which targeted several sites in the Gaza Strip in retaliation.
Four Palestinians were killed and more than 20 wounded when Israeli tank fire hit a building east of Gaza City where hundreds of mourners were gathered for a funeral, Palestinian medical sources said.
About half of those injured were in a serious condition, the medical sources said, and the number of deaths could rise.
Israeli Defense Minister Ehud Barak said the country's forces will not let "the grave events on the border" go unnoticed.
The IDF also said it targeted a rocket launching squad in the northern Gaza Strip after it fired rockets toward Israel.
More than 30 rockets fired from Gaza hit southern Israel, the IDF said.
An IDF strike west of Gaza City killed a militant and wounded four, one of whom is in critical condition, according to security sources with Hamas, which has governed Gaza since 2007. The militant was from Al-Saraya, the military wing of Islamic Jihad, they said.
In a separate incident, Palestinian medical sources in Khan Younis, in the south of the Gaza Strip, said an Israeli artillery shell hit a civilian house and injured a couple and their two children.