Palestinian militants in the Gaza Strip fired a rocket at Jerusalem Friday, setting off air raid sirens and opening a new front in three days of fighting that threatens to soon spill over into a ground war.

Israeli police spokesman Micky Rosenfeld said the rocket landed in an open area near Gush Ezion, a collection of Jewish settlements in the West Bank southeast of the city.

Hamas officials said the rocket was a homemade "M-75" rocket, a weapon that has never been fired before. Abu Obeida, spokesman for the Hamas militant wing, confirmed the rocket was aimed at Jerusalem.

"We are sending a short and simple message: There is no security for any Zionist on any single inch of Palestine and we plan more surprises," he said.

The attack marks a major escalation by Gaza militants. Not only is it an attack on the country’s self-declared capital, but it's proof that Gaza rocket squads have weaponry that can travel the roughly 75 kilometres between Gaza and Jerusalem.

The attack came just hours after militants fired rockets into the southern outskirts of Tel Aviv. Those attacks did not hurt anyone, but caused panic and jitters.

The Israeli military also showed footage of what was apparently Hamas trying to launch an unmanned drone aircraft, a weapon the group has not used before.

Israel considers these attacks to be a major escalation, and there are now worries the government could respond with a ground invasion of Gaza.

Earlier Friday, Israel offered to hold its fire while Egypt's premier made a three-hour visit to Gaza – but only if Hamas also observed the truce.

At first, it looked like the fighting that has gripped the region in recent days would halt while Hesham Kandil crossed into Gaza to meet with Hamas Prime Minister Ismail Haniyeh as a show of solidarity.

Israel kept its word at first, reports CTV’s Martin Seemungal, but Gaza militants fired off as many as 60 rockets as soon as Kandil crossed into Gaza.

Reports say Israeli aircraft struck back at more than 130 targets in Gaza. So far, there's no word on casualties from the morning onslaught.

At least 27 Palestinians -- including five children -- and three Israelis have been killed since fighting between the two sides intensified Wednesday.

The Israeli army on Friday warned 12,000 Gazans via text to avoid Hamas operatives.

Israeli Prime Minister Benjamin Netanyahu has said his army is hitting Hamas with “surgical strikes,” and has repeatedly vowed that Israel would "continue to take whatever action is necessary to defend our people."

That action could include assassinating Haniyeh, as well as other commanders, according to Israeli Foreign Minister Avigdor Lieberman.

"Every time that Hamas fires there will be a more and more severe response," he said. "I really recommend all the Hamas leadership in Gaza not to try us again. Nobody is immune there, not Haniyeh and not anybody else."

With Netanyahu up for re-election in January, some have questioned the timing of this strike against Hamas, noting the last time Israel went into Gaza in a major way -- in 2008-09 -- there was an election on the horizon, too. But Seemungal notes it’s not just Netanyahu who’s taking a forceful stance this time.

“The leaders of the other parties are lining up behind him essentially saying this has to be done, we need to take strong action and put a stop to this rocket fire out of Gaza. So he’s not the only one,” he said.

The people in southern Israel have almost grown used to small-scale fighting along the Gaza border over the last four years, Seemungal says.

Israel and Hamas have largely observed an informal truce since Israel's incursion into Gaza four years ago. Every so often, there are rockets fired and Israeli airstrikes on militant operations, then another truce, then another flare-up where Israel will go in and target the hardline militants firing the rockets.

“What’s happened this time is Hamas, which is the political power in Gaza, has been trying to rein in these hardline militants, and Israel has recognized that and has resisted actually going after Hamas itself,” according to Seemungal.

“That went out the window this week when they assassinated the military leader of Hamas because Israel had said they had had enough, that Hamas was not doing enough to rein them in, these other hardline organizations, so they went after Hamas.”

Hamas has responded with more rocket attacks, sending more than 300 rockets into Israel this week alone.

Israel has improved its missile defense systems in recent years, but it is facing a more heavily armed Hamas. Israel estimates the militants have 12,000 rockets, including more sophisticated weapons from Iran and from Libyan stockpiles plundered after the fall of Moammar Gadhafi's regime there last year.

After days of battering militant targets with airstrikes, Israeli troops, tanks and armored personnel carriers have now massed along the border near the Palestinian territory. As well, the Israeli government has approved the mobilization of up to 30,000 reservists for a possible invasion – the most significant call-up in 10 years -- signaling that a ground invasion could be imminent.

Michael Bell, a former ambassador to Egypt, Jordan, Israel and the Palestinian territories, says a ground strike would allow Israel to root out the weapons storage and manufacturing facilities in Gaza. It would also give a chance to go after the military leadership of Hamas.

But he says it could also be quite deadly.

“Gaza is one of the most densely populated places on Earth. And these missile facilities are located in dense urban centres,” he said from Ottawa. “So in order to get at them, one has to expect to incur certain civilian casualties.

“I think that’s a tragic consequence of what might happen, but I think it’s inevitable. No Israeli government could survive declining to act on what they see as provocation. It would be unacceptable.”

According to The Associated Press, an Egyptian official said Egypt proposed a cease-fire plan to Hamas, but the group rejected it because Jaabari's "blood has not dried yet." However the group said it would look at the proposal more closely in a few days.

Hamas said it would stop all offensives against Israel if Israel ceases its own salvos, curbs its border activities, refrains from assassinating Hamas leaders and ends its blockade of Gaza, said the official, speaking on the condition of anonymity.

An Israeli official, also speaking on the condition of anonymity, said Israel wants Hamas to end its rocket fire entirely.

"We're not interested in a timeout that returns us to square one," he said.

With reports from The Associated Press