JERUSALEM -- An anti-tank missile fired from the Gaza Strip struck a school bus in southern Israel Thursday, wounding two people, one of them critically, and prompting fierce Israeli retaliation that killed five Palestinians.
Israel unleashed airstrikes and tank fire against Hamas targets across the border in the heaviest assault on the coastal territory since a broad military offensive two years ago. Besides the dead, more than 30 Palestinians were wounded, said Palestinian health official Adham Abu Salmiya.
He said one of the dead was a 50-year-old civilian who was sitting outside his home when he was struck by tank fire. Three others were militants killed near the southern Gaza town of Rafah. The fifth man was a Hamas policeman.
Near midnight, the Hamas-run government reported that Palestinian militants had agreed to a cease-fire in an effort to halt the spiraling violence. After this announcement, Israeli aircraft targeted smuggling tunnels in southern Gaza, an abandoned house east of Gaza City and a group of armed men in that area, Hamas security officials said. No casualties were reported.
The military had no immediate comment on the reported air attacks.
The sudden outbreak of violence illustrated the fragile situation along the Israel-Gaza border, where small bouts of fighting can quickly escalate into heavy-scale warfare.
After two years of relative calm, tensions have been rising between Israel and Palestinian militants in Gaza over the past few weeks. For Israel, Thursday's attack was the most serious of this period.
But it also laid the groundwork for a major strategic breakthrough. The Israeli military activated a new cutting-edge missile-defense system for the first time, saying that the Iron Dome scored a direct hit on an incoming Palestinian rocket.
The escalation has also spilled beyond Israel's borders.
In the past month, Israel has intercepted a cargo ship that it said was carrying arms bound for Gaza, jailed an alleged Hamas rocket mastermind believed to have been captured in Ukraine and been accused of carrying out a mysterious airstrike that killed two people in Sudan. Israel has not commented on this week's airstrike, but officials have said they believe Sudan is a transit point for arms bound for Gaza.
Israel's defense minister, Ehud Barak, ordered the army to respond quickly to the attack on the school bus and said he held the Hamas militant group, which rules Gaza, responsible for the violence.
"We will respond until it will become clear that the Hamas fully understand that we cannot accept and we will not accept such events," he said at a military base in southern Israel.
Hamas issued a rare claim of responsibility for the bus attack, saying it was in response to the killing of three of its leaders earlier in the week. Usually, smaller militant factions claim responsibility.
Palestinian officials said Hamas leader Ismail Haniyeh was making calls to leaders in Egypt, Turkey and Qatar appealing for their intervention.
Israeli defense officials said the incident marked a significant moment that would warrant a severe response. But there were no immediate indications that the violence would devolve into all-out war.
Israeli medical services said the bus was nearly empty after dropping off school children and was carrying only the driver and a lone passenger at the time of the attack. A 16-year-old boy with a serious head wound was evacuated from the scene and undergoing surgery at a hospital. The driver was moderately wounded.
TV footage showed a yellow bus with its windows blown out and its rear charred.
Israeli President Shimon Peres condemned the attack from New York, where he was holding meetings at the United Nations.
"This is another example of Gaza becoming a terror state," he said in a statement. "Hundreds of thousands of mothers and children in southern Israel cannot sleep quietly at night as a result of the rocket fire from Gaza."
The American and British governments condemned the attack.
Israel usually responds with tough reprisals to Palestinian attacks. It launched an airstrike on a Hamas training facility in northern Gaza.
Later Thursday, Israeli aircraft and tanks attacked Hamas facilities in northern and central Gaza Strip. A tank shell also struck a fuel depot in northern Gaza, sending a plume of smoke above the area.
"Israel will not frighten us and will not terrorize us," said Hamas spokesman Ismail Radwan. "We call on the Arab masses and the Arab revolution to stand by the Palestinian people in Gaza and to urge their regimes and their governments to stop this escalation, which aims to create a new pool of blood in Gaza Strip and Israel should be held responsible for the consequences of this."
The missile attack came hours after Israel carried out airstrikes against tunnels it says are used by militants to smuggle weapons under the Egyptian border and carry out attacks.
Hamas and other Gaza militants have fired thousands of projectiles toward southern Israel in previous years. Israel launched a massive offensive in late 2008 to counter the near-daily barrage.
Israel recently deployed its first system to defend its tanks from anti-tank missiles. As a result, Gaza militants may be turning the weapons on new targets, since the attack on the bus appears to be the first time such a missile has been fired at a civilian Israeli target.
The military said that after the missile attack, about 45 rockets and mortar shells were fired from Gaza toward Israel, including one that struck a home, causing damage but no injuries.
In a separate incident, Israel said it had arrested five Hamas militants in east Jerusalem and charged them in a pipe bomb attack that wounded a sanitation worker last month.
In the West Bank, Israeli troops rounded up dozens of Palestinian women overnight in a massive sweep as part of a search for the killer of five Israelis in a nearby settlement last month.
Residents in Awarta said that between 100 and 200 women were taken into custody and that Israeli troops took their fingerprints and DNA samples from them. By midafternoon, all the women were believed to have been released.
Israel has been carrying out arrests in Awarta since a young Israeli couple and three of their children were stabbed to death as they slept in their home in the neighboring Jewish settlement of Itamar.
Ibrahim Barzak in Gaza City, Dalia Nammari in Ramallah, West Bank, and Ariel David in Tel Aviv contributed to this report.