An unofficial cease-fire appeared to be holding Wednesday between Israel and Gaza's Hamas rulers despite limited exchanges of fire.
Schools reopened in southern Israel and traffic-clogged Gaza's streets in signs of a pullback from the most serious escalation of cross-border fighting in months.
But while violence eased amid Egyptian mediation, Israeli forces and Palestinian militants were on hair-trigger footing, with rocket attacks from Gaza and Israeli air strikes in the enclave briefly resuming late on Tuesday after a day-long lull.
Despite dozens of rocket launchings and Israeli attacks, no deaths have been reported. Israel's Iron Dome anti-missile interceptors have destroyed some of the rockets and Palestinian militants vacated facilities targeted in the air strikes.
Towns in southern Israel, where rocket-warning sirens have disrupted daily life since the current round of fighting began on Monday, reopened classrooms. In Gaza, schools were also operating and cars filled the streets.
The Gaza frontier remained tense, however, with Israeli troops and tanks deployed along the border. Both Israel and Gaza's ruling Hamas militant group made clear that attacks by the other side would not be tolerated.
Yet violence could erupt again this weekend as large-scale protests are expected along the Israel-Gaza frontier marking the anniversary of weekly rallies.
The Israeli military bolstered its forces along the Gaza frontier in advance.
Israel and Hamas have fought three wars and dozens of skirmishes since the militant group seized control of Gaza in 2007. The latest round was triggered by a Gaza rocket fired early Monday that slammed into a house in central Israel and wounded seven people.
Prime Minister Benjamin Netanyahu rushed back to Israel from a trip to Washington to deal with the crisis. Israel struck back hard and hit dozens of targets in Gaza, including the office of Hamas leader Ismail Haniyeh. Gaza's Health Ministry said seven Palestinians were wounded in the airstrikes.
Netanyahu faced the difficult task of delivering a tough blow to Hamas while avoiding protracted fighting that could work against him in next month's national elections. He has come under heavy criticism from both allies and opponents for what they say has been a failure to contain Gaza militants.
The latest fighting has added to tensions that were already building ahead of the first anniversary on March 30 of the start of weekly Gaza protests at the border. Some 200 Gazans have been killed and thousands wounded by Israeli fire during those protests, and one Israeli soldier has been killed.
Israel says its use of lethal force is meant to stop attempts to breach the border and launch attack on its troops and civilians.
The protesters are demanding the right to return to lands Palestinians fled or were forced to leave in Israel during fighting that accompanied its founding in 1948.
Seven Israelis were injured in Monday's initial rocket attack that hit the village of Mishmeret, 120 km (75 miles) north of Gaza. No other casualties in Israel have been reported. Twelve Palestinians have been wounded by Israeli strikes, Gaza health officials said.
Egypt was expected to pursue further truce talks on Wednesday, said a Palestinian official involved in the efforts.
UN Middle East envoy Nickolay Mladenov told the Security Council on Tuesday he had been working with Egypt to secure a ceasefire and that a fragile calm had taken hold.
Security is a major issue for Netanyahu, in power for a decade and beset by corruption allegations that he denies. He is facing his strongest electoral challenge from a centrist coalition led by a former general.
