GAZA CITY - An Israeli air strike killed a Gaza militant Sunday just hours after Islamic Jihad vowed to observe an Egyptian-brokered truce following a day of violence which killed 10.

The spike in violence, which began when a rocket hit Israel on Wednesday and escalated sharply over the weekend, was the most deadly confrontation in and around the Gaza Strip in more than two months.

Shortly before dawn on Sunday, militant groups including Gaza's Hamas rulers and Islamic Jihad, which has been central to the latest bloodshed, said they would observe a truce as long as Israel reciprocated.

Calm prevailed for some eight hours before Israel mounted a fresh air strike on what the military said was 'a terrorist squad that was preparing to fire rockets at Israel,' killing one militant and wounding another.

The attack raised to 10 the number of Palestinian militants killed in little more than 24 hours, as well as one Israeli, who died after being hit by rocket shrapnel.

Witnesses named the dead man as Ahmed Jarghun and said he was a member of the armed wing of the leftist Democratic Front for the Liberation of Palestine (DFLP).

The DFLP was one of the groups which had signed up to the truce, but the faction made no mention of the ceasefire in a statement in which it called on militant groups to 'respond to this cowardly crime.'

Later on Sunday, another leftist group -- the Popular Front for the Liberation of Palestine (PFLP) -- claimed responsibility for firing two rockets at Ashkelon.

An Israeli police spokeswoman, however, said no rockets had hit Israel since the morning, while army radio reported that a rocket aimed at Israel had apparently fallen short in the northern Gaza Strip.

The Israeli strike occurred shortly after thousands of angry mourners packed the streets of Rafah for the funerals of the nine militants killed on Saturday, all of them from the Al-Quds Brigades, the armed wing of Islamic Jihad.

Wrapped in white shrouds draped with black Islamic Jihad flags, the bodies were carried through the streets as the crowds vowed bloody revenge.

Addressing the weekly cabinet meeting, Prime Minister Benjamin Netanyahu dismissed the truce as meaningless.
'There is no ceasefire,' he told ministers. 'I promise that the other side will pay even higher prices than what it has paid till now until it stops shooting.

'We will prevent any attempt to shoot at Israel, and will strike at anybody who nevertheless succeeds,' he said, saying the Jewish state would hold Hamas responsible for 'maintaining the quiet.'

'We are not being belligerent and do not seek a flare-up, but will protect ourselves according to these principles.'

Overnight, sources close to Hamas and Islamic Jihad said Egyptian intelligence officials had brokered the ceasefire which would go into effect from 6:00 am (0400 GMT).

Several hours later, a senior Jihad official confirmed the movement was observing the truce, which was agreed with its leadership in the Syrian capital, Damascus.

'Islamic Jihad is committed to the truce as long as the occupation commits to it,' the official told AFP on condition of anonymity.

By midday, the skies over Gaza remained quiet, although Israeli schools within a 40-kilometre (24-mile) radius of the coastal territory were closed, and police maintained a level of alert just one below the highest.

Military officials said the spike in violence began on Wednesday evening when a Grad rocket crashed into an area near the port city of Ashdod, sparking a triple Israeli air raid several hours later.

Then on Saturday, the air force attacked 'terrorists preparing to fire long-range rockets' into Israel, killing five Al-Quds militants and wounding another three critically.

In the ensuing violence, another four Jihad activists were killed and five injured in a series of air raids.

In Israel, one man died from shrapnel wounds after a rocket hit the southern city of Ashkelon, while another four Israelis were wounded, two of them seriously.

Saturday's flare-up was the deadliest since August, when clashes in and around the Gaza Strip killed 27 Palestinians and an Israeli.

That confrontation erupted when gunmen killed eight Israelis in the southern Negev desert on August 18 in an attack blamed on Gaza militants which sparked a week of air strikes and rocket fire.

The fighting ended with a truce on August 26, which had largely held until now.

EU foreign affairs chief Catherine Ashton expressed concerned over Sunday's violence.

'I am very concerned at the renewed exchange of fire... I call on all sides to respect the ceasefire brokered by Egypt,' she said.