Israeli warplanes carried out several raids in the Palestinian territory, shortly after four Israeli soldiers were injured in a bomb blast near border with Gaza.
The airstrikes martyred two Palestinian teenagers, Salem Sabah, 17, and Abdullah Abu Sheikha, 17, from southern Rafah city.
The flare-up, which started on Saturday and had died down by Sunday morning, was one of the biggest in the Gaza Strip since a 2014 war between Israel and Palestinian forces.
It began with a bomb blast on the Israel-Gaza border that wounded the Israeli troops. Israel responded with what the military said were air strikes and tank fire against 18 targets belonging to Hamas.
Gaza medics said that on Sunday they retrieved the bodies of two 17-year-old Palestinians killed by the Israeli tank fire.
No militant group in Gaza claimed responsibility for Saturday's explosion. Israeli Defence Minister Avigdor Lieberman said the Popular Resistance Committees, one of the smaller armed groups in Gaza, had detonated the bomb that wounded the soldiers.
"We will hunt down those responsible for yesterday's incident," Lieberman told Israel Radio on Sunday, adding Hamas was ultimately responsible for what happens in Gaza.
Hamas spokesman Fawzi Barhoum blamed the violence on Israel.
"Hamas holds the Israeli occupation fully responsible for the consequences of its continued escalation against our people," said Barhoum in a statement.
Tensions have risen along the Gaza border since U.S. President Donald Trump's recognition in December of Jerusalem as Israel's capital.
Israel waged a devastating 51-day military onslaught on the Gaza Strip in mid-2014 in which more than 2,300 Palestinians were killed and tens of thousands injured.
