The Palestinian Islamic Jihad group says it has agreed to stop rocket fire toward Israel in response to Egyptian mediation efforts.
Daoud Shehab, a spokesman for the Iranian-backed group, tells The Associated Press on Saturday that his movement is immediately halting the rocket attacks.
Israel has accused Iranian forces based in Syria of orchestrating the heaviest barrage of rockets to emanate from Gaza in months.
The rocket attacks followed the death of four Palestinians participating in a protest along Gaza's perimeter fence with Israel.
Egyptian mediators have been in the region for weeks, trying to secure calm and prevent a full-blown war between Israel and Gaza groups, led by the larger militant Hamas group.
The Israeli military has accused Syria and Iran of responsibility in a night-long barrage of rocket attacks out of the Gaza Strip and has threatened to strike Iranian targets in Syria in response.
Military spokesman Lt. Col. Jonathan Conricus told reporters on Saturday that the Palestinian militant group Islamic Jihad was behind the rocket fire, after receiving orders from Iran's "Al Quds" force based in Syria.
"We have seen and established a clear link between Gaza and Damascus," he said, adding that Israel's response will not be "limited geographically."
Islamic Jihad is an Iranian-backed military group that sometimes operates independently of Gaza's Hamas rulers.
Conricus said Israel still holds Hamas responsible for all fire out of Gaza, and has seen no signs of Hamas trying to stop the fire.
Israeli aircraft have struck dozens of militant sites across the Gaza Strip as militants fired some 30 rockets into Israel in the heaviest exchange of fire between the bitter enemies in several weeks.
The fighting early Saturday followed a bloody day of border protests, in which Israeli forces shot and killed four Palestinians protesting along the perimeter fence dividing Hamas-ruled Gaza and Israel.
The sudden burst of fighting and bloodshed complicated the mission of Egyptian mediators, who have intensified shuttle diplomacy to achieve calm and prevent a full-blown conflict between the militant Hamas group and Israel.
The Israeli military said it had struck some 80 sites across Gaza by early Saturday morning, including a security headquarters building.
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