The strikes on Thursday came after activists mobilised by Gaza's militant Hamas rulers launched incendiary balloons into Israel for a third straight day.

There were no immediate reports of casualties from the strikes, which could be heard from Gaza City. Israel also carried out airstrikes early on Wednesday, targeting what it is said were Hamas facilities, without killing or wounding anyone.

The military said fighter jets struck Hamas "military compounds and a rocket launch site" late on Thursday in response to the balloons. It said its forces were preparing for a "variety of scenarios including a resumption of hostilities".

Tensions have remained high since the ceasefire, even as Egyptian mediators have met with both Israeli and Hamas officials to try and shore up the informal truce.

Israel and Hamas have fought four wars and countless smaller skirmishes since the Islamic militant group seized power from rival Palestinians forces in 2007. Israel and Egypt have imposed a crippling blockade on Gaza, which is home to more than two million Palestinians, since Hamas took over.

Earlier, Israeli police used stun grenades and a water cannon spraying skunk water to disperse Palestinian protesters from Damascus Gate in east Jerusalem, the epicentre of weeks of protests and clashes in the run-up to the Gaza war.

After the crowds were dispersed, Palestinians could be seen throwing rocks and water bottles at ultra-Orthodox Jews walking in the area.

Calls had circulated for protesters to gather at Damascus Gate in response to a rally held there by Jewish ultranationalists on Tuesday in which dozens of Israelis had chanted "Death to Arabs" and "May your village burn".

The police had forcibly cleared the square and provided security for that rally, part of a parade to celebrate Israel's conquest of east Jerusalem.

In a separate incident, a Palestinian teenager died on Thursday after being shot by Israeli troops in the occupied West Bank during a protest against a settlement outpost, the fourth demonstrator to be killed since the outpost was established last month.

Nearly 500,000 Jewish settlers live in some 130 settlements across the occupied West Bank. The Palestinians and much of the international community view the settlements as a violation of international law and a major obstacle to peace.

Australian Associated Press