The Israeli military said its air defence system, known as Iron Dome, intercepted the rocket. There were no reports of casualties.

Israel and Hamas-ruled Gaza appear to be pulling back from the most serious escalation of cross-border fighting in months.

Israel rejected their report as "hostile, false and biased."

Two Palestinians were killed and two others injured after Egyptian troops pumped toxic fumes into a smuggling tunnel in the Gaza Strip, according to the Hamas-run Interior Ministry of Gaza.

Israeli Prime Minister Benjamin Netanyahu's coalition crisis eased on Monday when a coalition partner backed off a demand to be given the defense ministry, making an early election less likely.

The Israeli government has been rocked by the resignation of its defence minister over a cease-fire agreement with Gaza militants.

Israeli Defence Minister Avigdor Lieberman announced his resignation on Wednesday in protest at a Gaza ceasefire that he called a "capitulation to terror."

Experts say violence is escalating between Israel and Gaza because of a desire to save face after a botched operation became public.

The Israeli Defense Force is warning of rockets fired near Gaza Strip after a Hamas commander was allegedly killed in an Israeli raid.

The Palestinian Health Ministry said six people, including at least five militants, were killed and seven others wounded.