An Israeli man has been killed by rockets fired from the Gaza Strip.
Palestinian militants had vowed to retaliate after five militants were killed by an Israeli air strike on the south of the Gaza Strip.
Another four Palestinians were killed in further Israeli air raids after the rocket attacks.
Egypt is reported to have brokered a fresh ceasefire between Palestinian militant groups in Gaza and Israel, due to come into effect at 0600 (0400GMT).
"Egypt will pursue its contacts with all the sides until the agreement goes into effect," said an Egyptian official quoted by Reuters news agency.
Saturday's violence is the most serious since a major prisoner exchange between Israel and Hamas, the Islamist militant group that governs in Gaza.
Israeli police said at least 20 rockets and mortars were fired into southern Israel, killing one man in the coastal city of Ashkelon. Four other people were wounded by the attacks.
A Gaza Health Ministry spokesman said nine people had been killed and 15 wounded in separate attacks on militant targets.
An Israeli military spokesman confirmed a total of four strikes in Gaza, saying the military hit Palestinian militants from the Islamic Jihad, one of several groups in Gaza which fires rockets into southern Israel.
The spokesman said that the first attack, about midday local time, specifically targeted a cell responsible for a long-range rocket attack on Wednesday, that exploded deep inside Israel. That attack had caused no casualties.
Israel's military said its aircraft "targeted a terrorist squad... that was preparing to launch long-range rockets".
Islamic Jihad confirmed that five militants had been killed in the attack on Rafah, including one of its commanders, Ahmed al-Sheikh Khalil.
A spokesman said Khalil was one of the group's chief bomb makers.
"Today it was a great loss for us in the Islamic Jihad," he said. "The size of our retaliation will equal our loss."
By the evening 20 rockets and mortar bombs had hit southern Israel.
One rocket hit an apartment building in Ashkelon, injuring a 50 year-old Israeli, who later died of his wounds.
Israel's Channel 2 television reported that another rocket hit a school in the Ashdod region, causing heavy damage. No one was hurt because the school was closed for the Jewish Sabbath.
Islamic Jihad released photos of rockets being launched from the backs of pickup trucks. The group said this was the first time they had used this system; in the past it has fired them from ground launchers.
The group said four more militants had been killed in the later air strikes.
The Israeli military said it had hit the "terrorists that fired rockets on Israeli in the evening".
Islamic Jihad is one of the main militant groups in Gaza but is not directly affiliated with Hamas.
The violence comes less than two weeks after a major prisoner exchange which saw about 500 Palestinian prisoners released from Israeli jails in a swap for the captured Israeli soldier Gilad Shalit.
Some of those released were Islamic Jihad members.
A further 500 Palestinian prisoners are due to be freed as part of the deal later this year.
BBC Gaza correspondent Jon Donnison says an escalation in violence could jeopardise those releases.