A Gaza Strip militant group spearheading a recent campaign of rocket barrages into Israel said today it was prepared to cease fire if the Israeli military did so as well.

The rocket fire has provoked retaliatory Israeli airstrikes and yesterday nine militants and an Israeli civilian were killed in some of the worst violence in the area in months.

The exchange of fire continued overnight, with Palestinians firing 10 rockets into Israel in the early hours of the morning, and Israeli aircraft targeting six militant sites in Gaza, the military said. No casualties were reported by either side.

Egypt had been mediating truce efforts over the weekend, and late this morning, the Islamic Jihad militant group said it was ready to halt its attacks if Israel would halt its air strikes.

"When all jet fighters leave the skies of Gaza we will stop firing rockets," said Dawud Shehab, a senior member of Islamic Jihad.

There was no official comment from Israel. Israeli prime minister Benjamin Netanyahu has warned that Israel would step up its retaliatory attacks if necessary, but in the meantime, defence officials said, Israel was holding back in an effort to keep the violence from escalating further.

The latest round of violence was set off by a rocket attack earlier in the week.

Both sides have braced for further strikes.

As a precautionary measure, Israeli officials closed schools in southern communities within 25 miles of Gaza, as well as Ben-Gurion University in Beersheba and several colleges, which were to have begun their academic year today, police spokesman Micky Rosenfeld said. Police brought in reinforcements from other areas of the country.

More than a million Israelis live within the range of rockets possessed by Gaza militants.

In Gaza, militants who had been emboldened to remove their masks and emerge from their hideouts following a high-profile prisoner swap with Israel earlier in the month disappeared from the streets. The territory's ruling Hamas movement scaled back its police deployment, apparently afraid that police positions would be targeted by Israeli aircraft.

Hamas militants are not believed to be involved in the attacks, which were claimed by smaller factions. But Israel holds Hamas ultimately responsible for all violence against it emanating from the territory.

A Palestinian militant group later claimed one of its fighters has been killed and another wounded in an Israeli airstrike.

The Democratic Front for the Liberation of Palestine, a small militant group, said the men were members of the organisation.

The Hamas militant group's health ministry said the strike occurred along Gaza's border with Israel this afternoon.

The Israeli military confirmed the airstrike but gave no other details.

The Israeli military later said the airstrike targeted men who were preparing to fire a rocket into Israel.