More than 150 rockets have been fired into southern Israel by Palestinian militants in the Gaza Strip, according to the Israeli military.
The attacks triggered retaliatory air strikes and tank fire against militant targets in the blockaded enclave, bringing to an end a month-long lull in violence.
Israeli officials said a 50-year-old woman was severely wounded by rocket fire, while a teenage boy was mildly hurt as he ran for cover.
Gaza's Health Ministry said a 22-year-old Palestinian man was killed by an Israeli airstrike, and seven other Palestinians were wounded.
Israeli police said a house in the coastal city of Ashkelon was damaged.
The sudden outbreak of fighting came as leaders from Hamas, the militant group that controls Gaza, and the smaller armed faction Islamic Jihad were in Egypt for talks with mediators aimed at restoring a fraying ceasefire.
Hamas leaders had hoped the recent calm would pave the way for a deeper, longer-term ceasefire.
The Israeli military said dozens of rockets were intercepted by its Iron Dome rocket defence system, and that roads near the Gaza border were closed to civilian traffic.
Israeli police said they had dispatched bomb disposal experts to the country's south to deal with projectiles that landed in open areas.
The army said its chief of staff, Lt Gen Aviv Kochavi, convened an emergency session with top security officials to discuss the situation.
Tensions have been rising in recent days amid allegations from Hamas that Israel has been delaying the implementation of last month's ceasefire understandings.
On Friday, two Palestinians were fatally shot by Israeli forces during the weekly protests along Israel-Gaza perimeter fence. Palestinian militants also shot and wounded two Israeli soldiers along the border fence. No group claimed responsibility for the shooting.
In response, Israeli aircraft carried out retaliatory strikes, killing two Hamas militants.
More than 200 Palestinians and an Israeli soldier have been killed in the border protests.
Israel and Egypt have maintained a crippling blockade on Gaza since Hamas seized control of the territory in 2007. The sides are bitter enemies and have fought three wars and engaged in numerous smaller flare-ups of violence.
Following heavy fighting in early April, Israel agreed to ease the blockade in exchange for a halt to rocket fire. This included expanding a fishing zone off Gaza's coast, increasing imports into Gaza and allowing the Gulf state of Qatar to deliver aid to cash-strapped Gaza.
Hamas hoped that Egyptian mediators could further ease the blockade, which has ravaged Gaza's economy. For over a year, the Islamic group has orchestrated mass demonstrations each week along the Israeli frontier to draw attention to Gaza's plight.
