Israel said it launched a pre-emptive strike against Islamic Jihad, killing a top commander of the Palestinian militant group it blames for a series of recent attacks inside Israel.

Islamic Jihad said the Israeli bombardment amounted to a "declaration of war", hours before it unleashed what it said was an "initial response" of more than 100 rockets towards Israel.

There were no immediate reports of casualties inside Israel, as officials in the country's commercial capital Tel Aviv said they were opening the city's bomb shelters.

But in Gaza, a child was among those killed, according to the territory's health ministry, which is run by Islamist movement Hamas.

Hamas has fought four wars with Israel since seizing control of Gaza in 2007, most recently in May of last year. Islamic Jihad is a separate group, but aligned with Hamas.

The Israeli strikes were ongoing late Friday, targeting what the army described as militant targets across the territory it has blockaded since the Hamas takeover.

Israeli Prime Minister Yair Lapid said the strikes were a "precise counter-terror operation against an immediate threat".

- Five-year-old girl -

Flames poured out of a building in Gaza City following the first round of strikes, while wounded Palestinians were evacuated by medics.

Gaza's health ministry reported "a five-year-old girl, targeted by the Israeli occupation" was among nine people killed. A further 55 Palestinians were wounded, the ministry said.

Five-year-old Alaa Kaddum had a pink bow in her hair and a wound on her forehead, as her body was carried by her father at her funeral.

Islamic Jihad said several members of its military wing were among those killed, including "the great fighter Taysir al-Jabari 'Abu Mahmoud', the commander of the Al-Quds Brigade in the northern region of the Gaza Strip."

Hundreds of mourners gathered in Gaza City for the funerals of Jabari and others killed in the air strikes.

Israeli military spokesman Richard Hecht said "we are assuming about 15 killed in action" in Gaza, referring to Palestinian combatants.

Israeli tanks were lined up along the border and the military said Thursday it was reinforcing its troops.

US ambassador Tom Nides said Washington "firmly believes that Israel has a right to protect itself".

"We are engaging with different parties and urge all sides for calm," he wrote on Twitter.

UN Middle East peace envoy Tor Wennesland said he was "deeply concerned", warning that the escalation was "very dangerous".

- 'Pay the price' -

The strikes come four days after Israel closed its two border crossings with Gaza and restricted the movement of Israeli civilians living near the frontier, citing security concerns.

The measures follow the arrest in the occupied West Bank of two senior members of Islamic Jihad, which has a strong presence in Gaza. The militant group did not launch attacks on Israeli territory after the arrests.

Gaza City resident Abdullah al-Arayshi said the situation was "very tense". "The country is ravaged. We've had enough of wars. Our generation has lost its future," he told AFP.

Hamas, the militant group which rules Gaza, said Israel has "committed a new crime for which it must pay the price".

"The resistance in all its military arms and factions is united in this struggle and will speak loudly... All fronts must open fire on the enemy," it said in a statement.

Lapid, who was meeting with his security chiefs through the day, said: "Anyone who tries to harm Israel should know -- we will find you."

Islamic Jihad is blacklisted as a terrorist organisation by the European Union and the United States.

The office of Palestinian president Mahmud Abbas said the Israeli military action amounted to a "dangerous escalation" and called on the international community to curb Israeli "aggression."

The Israeli military banned large gatherings in communities within 80 kilometres (50 miles) of the Gaza frontier until Saturday evening.

The measure follows four days of road closures and other restrictions in the border area.

Palestinians including patients and those with Israeli work permits have been prevented from leaving the Gaza Strip since Tuesday, while the goods crossing has also been shut.

Gaza's only power station is at risk of imminent outage due to a lack of fuel supplies through Israel, its manager warned on Thursday.

This week's shutdown of the border area follows a raid by security forces in the northern West Bank district of Jenin.

Israeli forces detained Bassem al-Saadi and another senior member of Islamic Jihad. A 17-year-old member of the group was shot dead by Israeli forces during the raid.