The worst cross-border escalation in months has seen Egypt lead truce efforts, with hopes raised that a ceasefire may be imminent after talks failed earlier this week.

Gazans in the southern Rafah area told AFP they witnessed three air strikes Friday, with Israel's military announcing it fired on "military posts and concealed rocket launchers" of the Islamic Jihad militant group.

The latest strikes follow barrages of rockets fired Thursday evening towards Israel by militants in the densely populated Gaza Strip, which killed one civilian in the central city of Rehovot.

At least 31 Palestinians have been killed, according to Gaza's health ministry, including five top militants and multiple civilians as well as children.

Daily life in the coastal territory, ruled by the Hamas militant group, has largely come to a standstill, while Israel has told its citizens near Gaza to stay close to bomb shelters.

There was cautious optimism a truce may be nearing, with an Islamic Jihad source telling AFP a deal drawn up by Cairo had been circulated among the group's leadership.

"Israel must commit to stopping the assassinations in Gaza and the West Bank," a second source within Islamic Jihad said, detailing the group's key condition for a ceasefire.

- International push for truce -

Violence broke out Tuesday when Israel killed three top members of the group, while subsequent strikes have killed two other senior figures.

More than 90 people have been wounded in Gaza, while Israel's Magen David Adom emergency services has treated five people hit by shrapnel, glass or suffered blast injuries from the rocket fire.

The European Union called Thursday for an "immediate comprehensive ceasefire", while the United States urged that steps be "taken to ensure that violence is reduced".

Both have blacklisted Islamic Jihad and Hamas as terror organisations.

The Israeli military said it has hit 170 Islamic Jihad targets this week, while some 866 rockets have been fired from Gaza.

Israel said a quarter of the rockets fell inside Gaza and killed four, including three children, an accusation Islamic Jihad and Hamas did not respond to when approached by AFP.

This week's escalation is the worst since August, when 49 Gazans were killed in three days of fighting between Islamic Jihad and Israel.

At least 19 of those fatalities were children, according to the United Nations, while rocket fire wounded three people in Israel.

That conflict followed multiple wars fought between Israel and Hamas since the group took control of Gaza in 2007.

An Israeli blockade imposed since then has made it impossible for the vast majority of 2.3 million residents to leave Gaza, where poverty and unemployment are rife.