Israel has killed a Hamas military chief in an air strike in Gaza, prompting Palestinian militants to warn that the Jewish state had opened "the gates of hell".
Egypt said it was recalling its ambassador over Israel's hit on a car in Gaza City that killed Ahmed Jaabari and his bodyguard.
The air strike on Jaabari was followed by more than 20 air strikes in Gaza that killed another six people and wounded 65, according to the Hamas health ministry and rescue services.
The Israeli navy "targeted several Hamas terror sites stationed along the shoreline of the Gaza Strip", a military statement said.
The Palestinian envoy to the United Nations put the death toll at nine and said it would probably rise.
Israel warned it was only the start of an operation targeting militant groups in Gaza, which comes as the Jewish state prepares for general elections in January.
"If it becomes necessary, we are prepared to expand the operation," Prime Minister Benjamin Netanyahu said in a televised address on Wednesday evening, after holding consultations with his security cabinet.
Defence Minister Ehud Barak said the operation was aimed at strengthening Israel's deterrence, damaging militant groups' rocket-firing capabilities and stamping out attacks on southern Israel.
"We are at the beginning, not end of this action," he warned. "It won't be a quick fix."
At the security cabinet meeting "it was decided ... to permit the IDF (Israeli army), according to need and with the approval of the defence minister, to call up reservists," a cabinet statement said.
An army spokesman told AFP that some notices had been issued to specific personnel but that so far there was no general call-up of army reservists.
The US State Department backed Israel's right to defend itself and condemn recent Palestinian attacks.
Netanyahu's office said that he had called President Barack Obama and expressed "his deep appreciation" for the support.
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.
The Israeli army said it had also targeted "a significant number of long-range rocket sites" and was prepared to launch a ground operation if necessary to stamp out rocket fire.
Police said 81 rockets had been fired at Israel from Gaza in the aftermath of the Gaza City strike and that the level of alert had been raised across the area.
The Israeli strikes prompted widespread condemnation, with Egyptian President Mohamed Morsi recalling Cairo's envoy to Israel and summoning Israel's ambassador, his spokesman said.
Following a request from Morsi, Arab League chief Nabil al-Arabi said top Arab diplomats were preparing to hold an emergency meeting on Saturday to discuss the violence.
Britain also urged restraint and Russia said it was "very concerned", while Washington said it was watching developments in Gaza "closely".
The Qassam Brigades, in a furious statement, said Israel had "opened the gates of hell on itself", while Hamas spokesman Fawzi Barhum said the strike was tantamount to a "declaration of war".