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Islamic Jihad, another Gaza-based Palestinian group, said that it had fired one of the rockets that hit Tel Aviv.
Late on Thursday, Israel began moving troops towards the Gaza Strip and Ehud Barak, the Israeli defence minister, authorised the call-up of 30,000 reservists for a possible ground operations.
At least a dozen lorries carrying tanks and armoured vehicles were seen moving towards the border area, while buses ferried soldiers.
While southern Israeli areas near Gaza have long coped with rocket fire, the attacks on the Tel Aviv area illustrated the significant capabilities that Hamas has developed.
Palestinian fighters had previously hit Rishon Letzion before but never reached Tel Aviv, which is only 70km north of the Gaza Strip.
'Savage aggression'
At least 19 Palestinians, including two children, have been killed and more than 150 others wounded as of Thursday in fighting which began with an aerial attack that killed Ahmad Jabari, the Hamas military commander who was accused by Israel of overseeing attacks against civilians.
Thursday's deadly rocket fire on Kiryat Malachi was claimed by Jabari's group, the Ezzedine al-Qassam Brigades, in a statement on its website. Jabari's funeral took place in Gaza on Thursday.
"It is important to understand one simple point: there is no moral symmetry between the terrorists in Gaza and Israel," Binyamin Netanyahu, Israeli prime minister, said on Thursday
"They are committing double war crimes," he said. "They fire at Israeli civilians and hide behind Palestinian civilians."
Netanyahu referred to the Israeli attacks on Gaza as "surgical".
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