A leader of the Islamic Jihad militant group in Gaza announced late on Saturday that a ceasefire deal had been reached with Israel to end five days of heavy fighting.
But rocket fire persisted after the deadline, leaving the deal in question.
Islamic Jihad leader Mohamad al-Hindi had told the Al Kahera Wal Nas channel that the Egyptian-brokered deal would go into effect at 10pm local time (1900 GMT).
“Now, this agreement has been reached thanks to continuous Egyptian effort. We appreciate this effort,” he said.
Shortly before the truce was to take hold, Israel reported a heavy burst of Palestinian rocket fire towards southern and central Israel, while Israel said it was striking targets inside Gaza.
After the 10pm deadline, Israel reported additional rocket fire, and Israeli media said warplanes were responding.
There was no Israeli comment on the ceasefire announcement.
But the Egyptian station had earlier reported a deal was imminent.
Egypt frequently acts as a broker between Israel and Palestinian militant groups in Gaza.
A similar announcement last week by Egypt unravelled amid continued fighting.
The fighting has killed 33 Palestinians inside Gaza, including at least 13 civilians.
Two people were killed by rocket fire in Israel, including an 80-year-old Israeli woman and a Palestinian man from Gaza who had a permit to work in Israel.
The latest violence erupted on Tuesday when Israeli air strikes killed three senior Islamic Jihad commanders.
Israel said the air strikes were in response to a previous burst of rocket fire the previous week and that its attacks have been focused on Islamic Jihad targets.
But residents in Gaza said homes of people uninvolved in fighting had also been struck.
In a reminder of the combustible situation in the occupied West Bank, the Israeli military raided the Balata refugee camp near the northern city of Nablus, sparking a firefight that killed two Palestinians.
In a separate incident near the northern city of Jenin, Israeli police said they shot and killed a suspected Palestinian assailant who ran towards soldiers wielding a knife.
Meanwhile, Israeli military earlier on Saturday bombed an apartment belonging to Islamic Jihad commander Mohammed Abu Al Atta, among other targets including rocket launchers, it said.
Islamic Jihad militants fired several barrages of rockets towards southern Israel, where tens of thousands of Israelis were instructed to remain close to safe rooms and bomb shelters.
Hundreds of residents near the border were evacuated to hotels further north.
Israel’s military chief, Lieutenant General Herzi Halevi, said Israel had made “significant achievements” throughout the fighting and said the army was ready to continue its campaign.
“We are prepared to continue the targeted strikes and striking in a precise and increasing manner,” he added.
The hostilities erupted on Tuesday when Israel targeted and killed three senior Islamic Jihad commanders who it said were responsible for firing rockets towards the country last week.
At least 10 civilians, including women, young children and uninvolved neighbours were killed in those initial strikes, which drew regional condemnation.
Over the past few days, Israel has conducted more air strikes, killing other senior Islamic Jihad commanders and destroying their command centres and rocket-launching sites.
On Saturday, Palestinians ventured out to assess the damage wrought by Israeli warplanes and salvage whatever they could.
One man carefully pulled documents out from under the rubble. Another carried away a mattress.
Four homes in densely populated residential neighbourhoods were reduced to dust in the pre-dawn attacks.
The Israeli military alleged the targeted homes belonged to or were used by Islamic Jihad militants.
The residents denied the army’s claims and said they had no idea why their homes were targeted.
“We have no rocket-launching pads at all. This is a residential area,” said Awni Obaid, beside the debris of what was his three-storey house in the central town of Deir al-Balah.
The nearby house of his relative, Jehad Obaid, was also levelled.
He had been standing some hundred metres away when his apartment was bombed.
“I felt like vomiting because of the dust,” he said.
“This is extraordinary hatred. They claim they don’t strike at children, but what we see is craziness, destruction.”
Islamic Jihad has retaliated by firing more than 1,200 rockets towards southern and central Israel, according to the military.
On Friday, the group escalated its assaults and fired rockets towards Jerusalem, setting off air raid sirens in the Israeli settlements south of the contested capital.
Most of the rockets have fallen inside Gaza, landed in open areas or been intercepted by Israel’s Iron Dome aerial defence system.
But a rocket on Thursday penetrated missile defences and sliced through a house in the central city of Rehovot, killing an 80-year-old woman and wounding several others.
Hamas, the larger militant group that has fought four wars against Israel since seizing control of Gaza in 2007, has praised Islamic Jihad’s strikes but remained on the sidelines, according to Israeli military officials, limiting the scope of the conflict.
As the de facto government held responsible for the abysmal conditions in the blockaded Gaza Strip, Hamas has recently tried to keep a lid on its conflict with Israel.
Islamic Jihad, on the other hand, a more ideological and unruly militant group wedded to violence, has taken the lead in the past few rounds of fighting with Israel.
