One Israeli has been killed and five wounded in a missile strike launched from Gaza on the central Israeli town of Rehovot on Thursday evening.
It is the first Israeli fatality since the latest round of violence started and could bring about an escalation in this conflict.
The Israeli military says it is "trying to understand" how the missile evaded the Iron Dome defence system.
Twenty-eight Gazans have been killed in the violence, 14 of them Islamic Jihad militants including senior commanders.
Almost 600 rockets have been fired from Gaza at Israel in the last 48 hours, many of them landing short, within Gazan territory.
Earlier on Thursday Israeli forces killed two more senior Islamic Jihad commanders. The first, the head of the group's rocket brigade, was killed in a missile strike overnight.
Later in on Thursday afternoon his deputy was killed in a direct hit on an apartment building near Khan Younis.
In a statement on Thursday evening, Islamic Jihad vowed to fight on, saying it would "continue to respond to the targeted assassinations with rocket barrages".
"The assassinations of our commanders only encourages the combatants to continue in the struggle and fight the enemy," it said.
For its part, Israel has said it will continue to bomb Gaza as long as rockets continue to be fired at them.
An Egyptian-brokered ceasefire had seemed close on Wednesday evening but the exchange of fire has continued and a truce does not seem likely in the immediate term.
This spike in violence began early last week when Palestinian militants fired more than 100 rockets at Israel following the death of a prominent Palestinian from hunger strike in an Israeli jail.
Israel has refused to release his body for burial.
After a few days of calm, Israel launched Operation Shield and Arrow at 2am on Tuesday morning, initially killed three senior commanders and a number of civilians.
The fighting has continued in the days since.