Warplanes pounded Gaza for a second day Thursday as three Israelis and three Palestinians were killed in fierce fighting which began with Israel's targeted killing of a top Hamas chief.

Israel's harshest assault on the Palestinian territory in four years, which comes as the Jewish state heads towards general elections, prompted an emergency meeting of the UN Security Council amid growing international concern.

Police said that since Israel's targeted killing of Hamas military chief Ahmed Jaabari on Wednesday afternoon, militants have fired around 180 rockets over the border, one of which hit a house on Thursday morning, killing three Israelis and injuring another four.

And the Israeli air force has pounded Gaza with more than 100 air strikes, killing 11 and injuring at least 115, medics and Hamas officials said.

"We have three killed," Israeli police spokeswoman Luba Samri told AFP, saying four other people were also injured in a "direct hit on a house" in Kiryat Malachi, a town which lies 30 kilometres (18 miles) northeast of the Gaza Strip.

The attack on Kiryat Malachi was claimed by Hamas's armed wing, the Ezzedine al-Qassam Brigades in a statement on its website.

Israeli police said they had raised the level of alert across the entire country in order to deal with "the possibility of terror attacks" in response to Israel's killing of the Hamas chief.

"All the major cities in southern Israel were hit, and the majority of the more serious damage was in Beersheva," police spokesman Micky Rosenfeld told AFP.

Schools within a 40 kilometre (24 miles) of Gaza were closed, and those living within seven kilometres (four miles) of the strip had been told not to go to work, he said. "It's a pretty serious situation."

An AFP correspondent close to the Gaza border saw several Israeli jets flying south as well as convoys of military jeeps and at least two flatbed trucks carrying armoured bulldozers.

In Gaza, Palestinian medics said three Hamas militants were killed in an early strike near the southern city of Khan Yunis, raising to 11 the number of Palestinians killed since the hit on Jaabari at around 1400 GMT on Wednesday.

"Eleven people have been killed and 115 people injured," he told AFP.

Throughout the morning, further air strikes hit northern Gaza, Gaza City and east of Khan Yunis, injuring another three, medics and security sources told AFP.

Among the dead were five Hamas militants, two children, a woman and an elderly man, he said. The identities of the other two were not immediately clear.

The violence sparked a furious response from Egypt's Islamist administration, which has close ties with Gaza's ruling Hamas movement, with Cairo recalling its ambassador in protest at the Israeli operation.

Israel has said the strikes were only "the beginning" of an offensive targeting Gaza militants and warned it may expand its activity, with the army saying if necessary it was "ready to initiate a ground operation."

"If it becomes necessary, we are prepared to expand the operation," Prime Minister Benjamin Netanyahu warned on Wednesday evening, several hours after the start of Operation Pillar of Defence.

Defence Minister Ehud Barak said the operation was to strengthen Israel's deterrence, damage militant groups' rocket-firing capabilities and stamp out attacks on Israel.

Jaabari's death sparked fury in Gaza, with Hamas's armed wing warning saying that by killing its leader Israel had "opened the gates of hell on itself."

And Hamas spokesman Fawzi Barhum said the strike was tantamount to a "declaration of war."

In New York, the UN Security Council held an emergency 90-minute session to discuss the crisis, with Arab states pushing for a strong condemnation, but the US envoy strongly defending Israel's right to self-defence in the face of Palestinian rocket fire.

Amid fears of a regional flareup over the confrontation, US President Barack Obama and UN chief Ban Ki-moon both phoned Netanyahu and Morsi in a bid to de-escalate the conflict.

Britain urged restraint and Russia said it was "very concerned."

The air strikes capped five days of rising tension in and around Gaza, which saw Israel kill seven Palestinians and militants fire more than 120 rockets over the border, injuring eight.