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It was the largest daytime attack by Israel on the coastal enclave controlled by the Hamas Islamist group since the 2014 Israel-Gaza war, an army spokesman said.

Health officials in Gaza said the building was empty, but two Palestinians aged 15 and 16, among a crowd in a nearby public park, were killed.

The raids were a response to rockets fired into Israel, he said.

Only hours after Bennett's comment and Hamas's announcement of a ceasefire, red alert sirens sounded across the Gaza border region as mortar shells and rockets were fired towards Israel again.

Volatility along the border has intensified since Gazans launched near-weekly protests against Israel in late March.

Shortly after, more than a dozen rockets were fired toward Israel, according to the Associated Press, with no reports of casualties on either side.

Over 130, mostly unarmed, Palestinians have been killed by Israeli fire since protests began on March 30.

Hamas does not recognise Israel's right to exist but a year ago said it was ready to accept an interim Palestinian state limited to Gaza and the West Bank. "We have no intention to harm anyone who is not a terrorist", he said.

On Friday, thousands of Palestinians gathered near the Gaza border for their near-weekly protest.

The majority of those killed were involved in protests and clashes but others were seeking to breach or damage the border fence.

"Allowing Hamas to dictate the terms of the ceasefire after two months of arson attacks and hundreds of rockets on the residents of Gaza border communities is a serious mistake", read a statement released by Bennett.

Around 10 other passers-by were wounded, the officials said.

Hamas spokesman Fawzi Barhoum told Reuters: "Efforts by many parties have continued since the beginning of the escalation and the Israeli bombardment on Gaza".

Hamas said its rockets were meant to deter Israel from further action. The army said protesters attacked soldiers with grenades, bombs, Molotov cocktails, and rocks.

The Israeli army reportedly notified Hamas in recent days that if the incendiary kite and balloon attacks from the Gaza Strip don't cease, Israel would respond with major military action. Most recently, it has been struggling to cope with the widespread fires caused by the incendiary kites and balloons floating over the border.

The first tunnel was located in the south of the Strip inside Palestinian territory opposite Kerem Shalom, while a second tunnel in northern Gaza was hit early Saturday morning.

Poverty is widespread and vital infrastructure has collapsed under a 12-year blockade by Israel, which says its aim is to curb security threats by Hamas.