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Israel and Gaza militants traded more heavy fire early Thursday, the third day of the worst escalation of violence since the middle of last year over the Palestinian coastal enclave.

Air strikes and missiles from Israel have killed 25 Palestinians since Tuesday, said Gaza officials among them fighters and civilians, including several children.

Early Thursday, shops in Gaza were shuttered and the streets were largely abandoned as Israeli military aircraft circled over the territory where several buildings lay in ruins.

More than 500 rockets have been fired from Gaza at Israel since Tuesday, the army said, with no casualties reported in Israel so far.

Of these, 368 made it over the border and 154 were intercepted by the Iron Dome missile defence system, while 110 fell inside Gaza, it said.

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