Israel will cease its attacks on Gaza if Palestinian stop firing rockets and mortar shells at southern Israeli communities, Defence Minister Ehud Barak said on Sunday.

He spoke amid the worst cycle of violence in Gaza and southern Israeli in two years.

The violence has flared since a mortar shell fired from Gaza on Thursday afternoon hit an Israeli school bus and critically wounded a 16-year-old boy.

Since then, Israel has struck 11 groups it said were involved in the rocket and mortar fire, and bombarded another 15 targets in Gaza.

Palestinian groups have since Thursday fired at least 130 projectiles at southern Israel, including some 10 Russian-type Grad missiles and about 60 shorter-range rockets made in Gaza, a military spokeswoman in Tel Aviv said. The remainder have been mortar shells.

Since Thursday afternoon, at least 18 Palestinians have been killed and 60 wounded - about one third of them civilian women, men and children - in the intense Israeli airstrikes.

Israel carried out no new airstrikes during the night and early Sunday, the spokeswoman said, but three more rockets landed in the southern Israeli Eshkol region, with one of them hitting an electricity line and causing power blackouts.

Israel's newly deployed Iron Dome short-range missile defence system had shot down eight of the missiles and rockets since Thursday, the spokeswoman told the German Press Agency dpa.

There is no 'Bang-and-it's-over' solution against the rocket and mortar fire, Barak told Israel Radio. He said Israel would carry out a second Operation Cast Lead only if this was 'necessary.'

Abu Obida, the spokesman of Hamas, told a news conference in Gaza City late Saturday afternoon the group would discuss no ceasefire with 'the occupation (Israel) while our people are bombarded and massacres are committed against them.'

He said Hamas was claiming responsibility for 68 of the Grad missiles, rockets and mortar shells fired at southern Israel.

Taher al-Noono, the spokesman of the de facto Hamas in Gaza said his movement was seeking a mutual end to the violence in due time.