An Israeli air strike killed two Palestinian militants in the Gaza Strip on Thursday and Palestinians in the territory fired rockets deep into southern Israel in the latest round of cross-border violence.

The air strike targeted a car on a crowded Gaza street. Video footage taken minutes after the strike showed the passenger compartment wrecked and on fire but little damage to the immediate surrounding area.

The militants were identified as Essam Al-Batsh and Sobhi Al-Batsh, who Israel said had been planning attacks against its civilians and soldiers.

Hours later, Gaza militants fired a barrage of rockets into Israel, some striking near the city of Beersheba, police said. No one was wounded in the attacks.

A Hamas spokesman described the air strike as a crime and accused Israel of ratcheting up violence in the area.

We hold the government of the Zionist occupation (Israel) fully responsible for this crime and for the new escalation, spokesman Fawzi Barhoum said. Hamas gave no other details.

In Tel Aviv, an Israeli military spokeswoman confirmed an air strike had been carried out. She said the two men killed in the incident had been planning an attack on Israeli civilians and soldiers along Israel's border with Egypt's Sinai peninsula.

(They) were affiliated with a terrorist squad that intended to attack Israeli civilians and soldiers via the western border, an army statement said.

Hamas, an Islamist group sworn to Israel's destruction, has ruled the blockaded Gaza Strip since 2007, while President Mahmoud Abbas's Western-backed Palestinian Authority remains dominant in the occupied West Bank.

The army statement said that Essam had been involved in planning a suicide bombing in the southern Israeli resort of Eilat in 2007 in which three Israeli civilians were killed, and a number of other attacks, some of which had been stopped.

Essam was a member of the al-Aqsa Martyrs Brigades, an offshoot of Abbas's Fatah movement, group officials said. The Hamas said Sobhi was affiliated with its own armed wing.

Violence between Israel and Gaza militants had slightly abated recently although on Wednesday Israeli troops killed one Palestinian gunman and wounded another in a cross-border raid, witnesses and hospital officials said.

(Reporting by Nidal al-Mughrabi; Writing by Ori Lewis in Jerusalem)