The Islamic militant group was badly bruised during its last full-fledged confrontation with Israel four years ago that ended with an informal truce, although rocket fire and Israeli airstrikes on militant operations continued sporadically. The Islamic militant group appeared better prepared this time with a more powerful arsenal.
Just a few years ago, Palestinian rockets were limited to crude, homemade devices manufactured in Gaza. But in recent years, Hamas and other armed groups have smuggled in sophisticated, longer-range rockets from Iran and Libya, which has been flush with weapons since Moammar Gadhafi was ousted last year.
Most of the rockets do not have guided systems, limiting their accuracy, though Israeli officials believe the militants may have a small number of guided missiles that have not yet been deployed.
Hamas said the two rockets aimed at the two Israeli cities Friday were made in Gaza, a prototype the militants call M-75, and have a range of about 80 kilometers (50 miles).
The air raid sirens sounded in Jerusalem after the start of the Jewish Sabbath in the holy city, claimed by both Israel and the Palestinians as a capital and located about 75 kilometers (47 miles) from Gaza. Israeli police spokesman Micky Rosenfeld said the rocket landed in an open area southeast of the city.
Earlier Friday, Gaza militants fired toward Tel Aviv and an explosion was heard in the city, but no injuries were reported. Hamas had first targeted Tel Aviv on Thursday, an unprecedented achievement for the group.
"We are sending a short and simple message: There is no security for any Zionist on any single inch of Palestine and we plan more surprises," Abu Obeida, spokesman for the Hamas militant wing, said of the rockets aimed at Israel's two main cities.
A senior Hamas official said that Egypt, which often mediates between Hamas and Israel, was working behind the scenes to arrange a truce.
The official, speaking on condition of anonymity because he was discussing a sensitive diplomatic matter, said Hamas was demanding an end to the offensive, limits on Israeli ground activities along the border, a permanent halt in assassinations of Hamas leaders and an end to Israel's blockade of Gaza.
"These conditions must be honored and sponsored by a third party," he said. "We will stop all armed activities out of Gaza in return."
Israel is unlikely to accept some of the demands, particularly a permanent halt to military operations against Hamas.
An Israeli official refused to say whether Egypt or any other country was involved in cease-fire efforts but said Israel would not settle for anything less than a complete and longstanding halt to the rocket fire. "We're not interested in a timeout that returns us to square one," he said, speaking on condition of anonymity because he was not allowed to discuss the matter with the press.
Hamas' political rival in the West Bank, Palestinian President Mahmoud Abbas, said in a televised speech Friday that he has urged the U.S. and European countries to pressure Israel to halt the offensive. Abbas also called for Palestinian unity.
Hamas wrested Gaza from Abbas in 2007, deepening a split the two sides have been unable to overcome.
Despite the Gaza fighting, Abbas said he was determined to seek U.N. recognition of a Palestinian state in the West Bank, Gaza and east Jerusalem on Nov. 29. Such recognition of Palestine as a non-member observer state would be a largely symbolic step, but Israel and the U.S. oppose the idea, saying it's an attempt to bypass negotiations.
In Israel, military spokeswoman Lt. Col. Avital Leibovich said no decision has been made yet on a ground offensive but all options are on the table. Dozens of armored vehicles have been moved to Israel's border with Gaza since fighting intensified Wednesday, following Israel's assassination of the Hamas military chief.
She said 16,000 reserve soldiers were called up Friday, and the army could draft an additional 14,000 soldiers. She did not say where the reservists were being deployed.
Defense Minister Ehud Barak asked the Cabinet at a special meeting Friday night for authorization to activate additional soldiers.
The violence has widened the instability gripping the region, straining already frayed Israel-Egypt relations. The Islamist government in Cairo, like Hamas linked to the region-wide Muslim Brotherhood, recalled its ambassador in protest and dispatched Prime Minister Hesham Kandil to show solidarity with Gaza.
Kandil called for an end to the offensive while touring Gaza City's Shifa Hospital with Ismail Haniyeh, the Gaza prime minister who was making his first public appearance since the fighting began.
In one chaotic moment, a man rushed toward the two leaders, shouting as he held up the body of a 4-year-old boy. The two prime ministers cradled the lifeless boy who Hamas said was killed in an Israeli airstrike a claim Israel denied.
Fighting to hold back tears, Kandil told reporters that the Israeli operation must end.
"What I saw today in the hospital, the wounded and the martyrs, the boy ... whose blood is still on my hands and clothes, is something that we cannot keep silent about," he said.
Israel said it halted its incessant air attacks on militant targets in Gaza during Kandil's visit, though Hamas security claimed three airstrikes hit the territory during that period.
Militants, meanwhile, fired off more than 60 rockets after Kandil arrived in Gaza. The pace of cross-border fighting quickly resumed after the Egyptian leader's departure.
In Egypt's two largest cities, Cairo and Alexandria, thousands protested the Israeli offensive Friday in marches organized by Egyptian President Mohammed Morsi's Muslim Brotherhood. Protesters waved Palestinian flags and chanted slogans against Israel. In Cairo's Tahrir Square, a few hundred protesters burned an Israeli flag.
Prominent Brotherhood figures took part, many brandishing the checkered Palestinian scarf, or keffiyeh, during the marches.
Small anti-Israeli demonstrations occurred in east Jerusalem and the West Bank. Police dispersed the crowds with tear gas and stun grenades. And in Iran, a close Hamas ally, thousands of people took to the streets in the capital Tehran. The demonstrators carried banners denouncing Israel. They chanted "Death to the U.S." and "Death to Israel."
In Europe, reaction was mixed. Germany held Hamas responsible and urged Egypt to pressure the Islamists to halt the violence, while Britain cautioned Israel against launching a ground offensive.
"When Israel has entered into ground invasions in other conflicts that is when they have lost a good deal of international sympathy and support, and of course civilian casualties become much harder to avoid in that situation," Foreign Minister William Hague told reporters in London.
U.N. chief Ban Ki-moon announced plans to visit the Mideast region soon in a bid to reduce tensions, but his spokesman Martin Nesirky refused to discuss specific sites, countries or dates for the visit.
Israeli Prime Minister Benjamin Netanyahu appeared determined to move forward. "The Israeli military "continues to strike hard against Hamas and is prepared to expand its action into Gaza," he said.
At least 27 Palestinians, including 14 militants and six children, as well as three Israelis have been killed in the fighting a relatively low toll compared to the beginning of Israel's previous major offensive against Hamas four years ago. Netanyahu has said the air force is trying to strike surgically and avoid harm to civilians.
The 4-year-old boy whose body had been handed to Kandil and Haniyeh was killed along with a young man earlier Friday when an Israeli missile struck close to their homes in the town of Jebaliya near Gaza City, relatives said.
The area near the boy's home showed signs that a projectile had exploded there, with shrapnel marks in the walls of surrounding homes and shattered kitchen windows. But neighbors said security officials quickly took what remained of the projectile, making it impossible to verify who fired it.
Kandil's visit came after a night of fierce exchanges, with dozens of rocket barrages setting off sirens throughout southern Israel, an area with a population of about 1 million.
Federman reported from Jerusalem. Associated Press writer Ibrahim Barzak in Gaza City contributed to this report. Egypt president vows to stand by Gaza
Egypt's Islamist president says his country will stand by Palestinians in the Gaza Strip and demanded Israel stop its latest offensive on the Hamas-ruled territory.
Mohammed Morsi says Egypt "will not leave Gaza on its own" and warned the "aggressor to stop the bloodshed or face the wrath" of Egypt's new leadership and institutions.
Morsi spoke on Friday at a mosque near his house on the outskirts of Cairo. The sermon was his harshest condemnation yet of the Israeli offensive.
Morsi said he dispatched his prime minister to Gaza to send a clear message that Egypt supports the people there and will not tolerate the killing of civilians.
Hamas is an offshoot of Morsi's Muslim Brotherhood group in Egypt. The Brotherhood led protests across the country on Friday against Israel.