Israel's Prime Minister Benjamin Netanyahu on Sunday gave a harsh response to fresh rocket attacks from the Gaza Strip, calling the recent escalation of conflicts a "battle."

"We are in the midst of battle ... We made them (militant groups) pay a heavy price and, of course, will continue (military operations) as long as necessary," Netanyahu told the ministers at his cabinet's weekly session.

"We are still on alert in order to counter the possibility of a militant attack on our southern border. There's no doubt that the army's strike disrupted this plan, though only days will tell to what extent," Netanyahu said, referring to the killing on Friday of a top militant in Gaza who plotted to carry out an imminent attack on Israel's border with Egypt.

In the worst flare-up of cross-border violence in months, Palestinian militants in Gaza fired some 120 rockets into southern Israel over the weekend, the military said.

Eight people were wounded in the rocket fire. One of them is a Thai worker who sustained critical injuries, Israeli media reported.

The latest rocket strikes began Friday when Israeli aircraft killed Popular Resistance Committees (PRC) chief Zuhir Mussah Ahmed al-Qaissi, along with his assistant, Ahmed Mahmud Hananni, while they were traveling in a car in Gaza City.

The military said the group was set to carry out a major terror attack against Israelis on the Israel-Egypt border via the Sinai Peninsula in the coming days.

Qaissi was among the militants who "planned, funded and directed" an attack near the southern port city of Eilat last August in which eight Israelis were killed and more than 30 others were wounded. He was also in charge of transferring funds from Lebanon-based Hezbollah to terror organizations in Gaza, the military said in a statement.

Militants affiliated with the PRC and Islamic Jihad responded to Qaissi's killing with rocket salvos at major cities in southern Israel and communities in the vicinity of the coastal enclave, forcing hundreds of thousands of Israelis to seek refuge in neighborhood bomb shelters or reinforced-concrete safety rooms at homes.

In response to the bombardment, the Israeli Air Force carried out numerous retaliatory strikes, which reportedly included drones, throughout Gaza on Friday and Saturday, hitting rocket launching squads as they prepared to fire, as well as weapons storage and manufacturing sites, the military said in statements to the press.

About 18 militants were killed and more than 20 others were wounded in the airstrikes, medical sources said.

"Hamas uses other terror organizations to carry out terror attacks against the State of Israel and will bear the consequences of these actions in any future operation launched by the army in order to eliminate the terror threat and restore the relative calm to the area," according to the military.

The exchanges of fire continued into Sunday. Israeli aircraft targeted a militant who fired a rocket at Ashdod at noon, while a total of 10 to 15 rockets were fired since early morning, according to local media.

Also Sunday, the mayors of southern Israeli cities ordered that schools remain closed, including all universities and colleges, affecting over 200,000 students. Netanyahu also ordered to close Route 12, a road adjacent to the Egyptian border which was targeted by militants in August's attack.

While near 70 projectiles landed in open areas during the weekend, Israel's Iron Dome anti-rocket defense system succeeded in shooting down 28 of 31 Grad-type rockets that were fired at Beersheba in the central Negev desert and the coastal cities of Ashdod and Ashkelon, according to local media reports on Sunday.

Defense Minister Ehud Barak said during a visit to an Iron Dome battery on Saturday that "this current round (of hostilities) in the Strip is far from over, and we must remain vigilant and alert in the face of a potential terror attack from Sinai."

Estimating that the exchanges of fire would continue over the next few days, Barak warned that Israel would "act against anyone who attempts to send rockets or perpetrate terror attacks. Anyone attempting such an attack will pay the full price. Immunity will be granted to nobody (who attempts such an attack)," Barak's office quoted him as saying in a statement.

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