GAZA/JERUSALEM (Reuters) - Israel killed a top commander from the Iranian-backed Palestinian militant group Islamic Jihad on Tuesday in the Gaza Strip, drawing day-long rocket salvoes in the worst cross-border fighting in months.

The rare targeted strike which killed Islamic Jihad’s Baha Abu Al-Atta in Gaza came as Syrian state media said a separate missile attack had hit the home of an Islamic Jihad official in Damascus, killing two people including one of his sons.

Syria said Israel carried out the Damascus strike. Israel did not comment.

As the rocket fire and Israeli air-strikes continued into the night, Gaza medical officials said 10 Palestinians had been killed, including Al-Atta and his wife.

About 25 Israelis were hurt in the Gaza rockets salvoes, some of which reached as far as Tel Aviv.

The U.N.’s Middle East envoy was en route to Cairo to mediate a truce, a diplomatic source told Reuters.

Israeli Prime Minister Benjamin Netanyahu said Al-Atta was a “ticking bomb,” responsible for a string of recent cross-border rocket, drone and sniper attacks and was suspected of planning more very soon.

“Israel is not interested in escalation, but we will do everything required to defend ourselves,” said Netanyahu, who oversaw Israel’s last Gaza war in 2014. “This could take time.”

At Al-Atta’s funeral in Gaza, mourners fired guns into the air chanting “revenge!” as Islamic Jihad leader Khaled Al-Batsh said: “Israel executed two coordinated attacks, in Syria and in Gaza, in a declaration of war.”

However, financial market reaction was muted, anticipating no major escalation. Recent such rounds of violence have ended with the help of Egyptian and U.N. mediation.

“The United Nations has been involved throughout the day to de-escalate,” a diplomatic source told Reuters on condition of anonymity.

Hamas, the Islamist group that rules Gaza, joined Islamic Jihad in condemning Israel.

Though both are sworn to the destruction of Israel, they have not always been in lockstep on strategy. Islamic Jihad, free of the burden of governing Gaza’s impoverished 2 million Palestinians, has at times chafed at Hamas’s efforts to secure a long-term ceasefire with Israel.

Israel’s military chief, Aviv Kochavi, said Al-Atta had been obstructing the truce bid. Hamas said Israel “bears full responsibility for all consequences of this escalation,” and pledged that Al-Atta’s death “will not go unpunished.”

IRAN SHOWDOWN?

The exchange of fire sent civilians on both sides huddling for shelter and forced businesses and schools to close.

Al-Atta, 42, and his wife were killed in the pre-dawn strike that destroyed a floor in their home, scattering debris around their neighborhood.

Slideshow ( 30 images )

Further air-strikes in Gaza, which the Israeli military said targeted Islamic Jihad gunmen and various sites belonging to the group, killed eight more Palestinian men. Islamic Jihad confirmed that four of those men were its members.

Gaza residents said four others belonged to another armed group. Medical officials said 30 Palestinians had been wounded, as ambulances streaked through abandoned streets and Israeli missiles landed, many in open areas.

In Israel, officials said about 25 people had sustained mostly light injuries. Among the sites hit by Palestinian rockets were a toy factory in the border town of Sderot and a highway where CCTV footage showed a bus barely escaping the impact.

The Israeli military said that around 200 rockets were fired at Israel, some of them reaching as far as the country’s commercial hub Tel Aviv. Dozens were intercepted and dozens more fell in open areas.

Slideshow ( 30 images )

The shekel ILS= was up 0.1% against the dollar, recovering from an earlier dip. The main Tel Aviv share index .TA125 closed 0.1% lower.

U.S. Ambassador to Israel David Friedman said on Twitter:

“Palestinian Islamic Jihad, an Islamist terrorist org backed by Iran, is again attacking Israel with 100’s of missiles aimed at civilians. We stand w(ith) our friend & ally Israel.”

Israel casts Gaza tensions as part of a regional struggle with arch-foe Iran that has also played out in Syria.

Right-wing Netanyahu has invoked such scenarios in trying to form a broad coalition government with center-left rivals to secure a fifth term after two inconclusive elections this year.

Islamic Jihad said the target of the Damascus attack was the home of a political leader, Akram Al-Ajouri. Israel’s Army Radio described Al-Ajouri as head of Islamic Jihad’s military wing.

At the scene of the Damascus strike, a Reuters journalist said the top floor of a two-storey building had been completely scorched. It was unclear whether Al-Ajouri was hurt.

Syrian state media said six people were wounded as well as the two people killed.

In recent years, Israel has carried out hundreds of strikes in Syria against Iran and the Tehran-backed Lebanese Hezbollah group, which it calls the biggest threat to its borders.