A series of such incidents this month has raised concerns over the possibility of a larger escalation before Israel's September 17 elections.

The punitive reduction in the flow of fuel to the strip's main power station by half will mean a cut in the already rationed electricity supply.

Three rockets were fired from Gaza into southern Israel on Sunday night, the Israeli army said, and two were intercepted by air defence systems.

Medics reported one minor injury to a woman who fell while running to a bomb shelter.

"In response, a short while ago, (Israeli air force) fighter jets struck a number of terror targets in a Hamas military compound in the northern Gaza Strip, including the office of a Hamas battalion commander," a statement Monday morning added.

A Palestinian security source said there were no casualties.

A separate statement from Israeli defence ministry unit COGAT said the latest fuel cut was personally ordered by Prime Minister Benjamin Netanyahu, who is also defence minister.

It said he "ordered to downsize the transfer of fuel through the Kerem Shalom (border) crossing to the power station in Gaza by half, effective this morning and until further notice."

Hamas denounced the cut as an "act of collective punishment that violates all humanitarian and international laws."

It has not claimed responsibility for the rocket fire. Other militant groups, most prominently Islamic Jihad, also operate in the Gaza Strip.

- 'Message to Israel' -

Netanyahu is fighting for reelection in September 17 polls, with political opponents calling for tougher action against Islamist movement Hamas.

Nevertheless, analysts say, he is anxious to avoid an escalation ahead of the election due to the political risk involved.

Israel and Palestinian militants in Gaza have fought three wars since 2008.

Since the start of August, incidents have included rocket fire from Gaza, infiltration attempts by armed Palestinians and return fire by Israel, the Israeli army says, threatening a fragile ceasefire.

Israel has also used fishing restrictions and fuel supplies as weapons, harshening measures on the blockaded coastal strip in response to violence.

Fuel deliveries, which are coordinated with the United Nations and paid for by Gulf state Qatar, were part of the truce agreement.

They have improved electricity supply in the enclave, where until the latest cut residents were getting around 10 hours of power a day, according to the UN.

In the past, the daily power supply could be as low as four hours.

There has been speculation in Israel and the Gaza Strip that Hamas has turned a blind eye to rocket fire and infiltration attempts instead of preventing them in a bid to pressure Netanyahu into further concessions.

"Hamas wants to send a message to Israel to implement the agreement and also a message to Qatar and Egypt so that they pressure Israel," said Jamal al-Fadi, a political science professor in Gaza.