"Israeli soldiers stand near a destroyed building in the northern Gaza Strip after several rockets, said to be fired from Lebanon, struck northern Israel."
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The rockets, fired from southern Lebanon, injured two Israelis and drew an immediate, although relatively low-key response. Israel fired about five artillery shells at the location from where the missiles were launched.
Fouad Siniora, the Lebanese prime minister, immediately condemned the attack and United Nations peacekeepers deployed in the country's south issued a plea for maximum restraint.
The key danger is that a war between Israel and Lebanon could erupt, marking a major escalation of the Gaza crisis. But this is only likely to happen if Hizbollah, by far the largest guerrilla movement in southern Lebanon, was responsible for the attack. Early signs suggest that Hizbollah was not involved and instead a faction of the Popular Front for the Liberation of Palestine might have fired the rockets.
An Israeli army spokesman said the retaliation had been a "pinpoint response at the source of fire" - a limited military reaction that appeared to signal a desire to avoid escalation.
Israeli forces have been on alert in the north, anticipating that Hizbollah or Palestinian groups could retalite for the operation in Gaza. Hizbollah fired about 4,000 rockets into Israel during the war of 2006. But the northern border had been quiet for almost two years, reflecting a tacit armistice between Israel and Hizbollah.
"We took into account there would be an attempt by Palestinian groups to express solidarity," said Shalom Simchon, an Israeli cabinet minister, said after the rocket attack. One missile punched a hole in the roof of a home for the elderly in the town of Nahariya.
In Gaza, Israeli aircraft bombed targets across the Hamas-ruled territory, killing three guerrillas and a woman. A civilian was shot dead during an army raid at the southern end of the territory.
American backing for a truce proposal has raised expectations of an end to an onslaught that has killed almost 700 Palestinians.
Although Israel has pressed on with its offensive, the government has accepted the "principles" of a peace plan drafted by Egypt and France. Two senior Israeli officials, Amos Gilad from the defence ministry and Shalom Turjeman, from the prime minister's office, arrived in Cairo to discuss the proposals.
Ten Israelis have died in the Gaza conflict, seven of them soldiers, including four killed by "friendly" fire.
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