Palestinian militant group Islamic Jihad fired rockets into Israel on Thursday, ending a week-long Egyptian-brokered moratorium, in what it called an initial response to deadly Israeli raids in the West Bank.

No one was injured by the salvo against the border town of Sderot. Israel later carried out an air strike against a rocket launcher in the northern Gaza town of Beit Hanoun.

No one was hurt in the first such Israeli attack in a week.

Islamic Jihad, a relatively small faction that like the powerful Hamas refuses to accept co-existence with the Jewish state, had vowed revenge after Israeli troops killed four of its members in the occupied West Bank on Wednesday.

Hamas said such 'aggression' risked killing off Cairo's mediation, seen as key to securing enough quiet for there to be progress in US-sponsored peace talks between Israel and Western-backed Palestinian President Mahmoud Abbas.

But Hamas, which controls the Gaza Strip and is seeking a reopening of the territory's borders as part of a truce deal, stopped short of abandoning the ceasefire talks.

It has largely held its fire since March 3, when Israel ended a five-day offensive against Gaza rocket crews in which more than 120 Palestinians, many of them civilians, and two soldiers died.

Mark Regev, a spokesman for Prime Minister Ehud Olmert, said Israel would hold Hamas accountable for every rocket fired from the Gaza Strip, territory the group seized in fighting against Abbas's Fatah faction in June.

'When another group publicly takes responsibility, as happened earlier today, such a group could not be shooting rockets without the acquiescence and collaboration of Hamas. We will not allow Hamas to sub-contract out terrorism,' Regev said.

In the occupied West Bank on Wednesday evening, undercover Israeli commandos drove into the town of Bethlehem and killed a local Islamic Jihad leader, two of his comrades, and a militant from al-Aqsa Martyrs Brigades, an armed Fatah wing.

An Israeli military spokeswoman said the soldiers had planned to arrest the Palestinians but opened fire after spotting weapons. The Islamic Jihad men had been involved in attacks, she said.

Another Islamic Jihad militant was killed by Israeli troops earlier in the West Bank town of Tulkarm.

Israel has played down speculation a formal ceasefire could be imminent. Olmert offered to halt attacks on Gaza if there are no rocket launches, but Israel argues that its West Bank raids are needed to stop militants from striking.

At least 12 rockets were fired from Gaza on Thursday. A house was damaged but there were no casualties, the Israeli military said.

'This was our initial response,' an Islamic Jihad spokesman said. The faction suspended its rocket launches on March 5.

As part of any truce, Hamas is demanding a say in the future functioning of the Gaza Strip's border crossings, a condition rejected by Israel. - Reuters