ISRAEL struck targets in the Gaza Strip yesterday after Palestinian militants fired rockets at southern Israel.

The militants' attack came after an air strike on Sunday that wounded two militants and eight bystanders.

The army said it had targeted Hamas terror activity sites and terrorist squads responsible for the rocket fire in the latest attack.

Gaza hospital officials said one Islamic Jihad militant thought to have been involved in the rocket attack had been wounded by Israeli tank fire near Rafah.

The Israeli army says 470 rockets have been fired from Gaza this year.

The armed wing of Hamas, the Palestinian Islamist faction that controls the Gaza Strip, said it had carried out the latest rocket attack with the militant Islamic Jihad group.

It was the first time since June Hamas had acknowledged launching rockets at Israel.