A boy, 13, was seriously wounded and several others were hurt by the mortar which landed near a kibbutz.
Israeli tanks shelled Gaza City, as Defence Minister Ehud Barak ordered the army to respond quickly.
A 50-year-old man was killed and a child, 4, was injured.
Several others were also hurt.
Israel also launched an air strike on a target in northern Gaza. The site was a training camp run by the Islamist Hamas movement, the AP news agency reports. (read more)