Israel hit a house on Sunday while conducting air strikes on the Gaza Strip aimed at Hamas targets, killing a Palestinian woman and her daughter, medical officials said.
The deaths followed clashes between Israeli soldiers and Palestinians have triggered fears of greater escalation.
The Israeli military reported that the rocket had targeted two weapon sites belonging to Hamas, which controls the Strip, in response to two rockets that were launched into Israel on Friday and Saturday
Witnesses said that the rockets were powerful, creating a huge explosion at one Hamas camp in Gaza Strip.
The size of the explosion caused a house to collapse while its residents were sleeping inside.
Gaza Health Ministry spokesman Ashraf al Qidra reported that a 30-year-old pregnant woman along with her three year-old daughter died in the explosion.
Adding that a five-year-old boy and a man were wounded.
Within recent weeks, several people have been killed in Jerusalem, the occupied West Bank, Gaza Strip and Israeli cities.
The continuing violence is creating concern over a new Palestinian uprising.
Israel limits Palestinian access to Jerusalem's Old City, which has aggrevated many Palestinians, igniting fear that Israel aims at changing the religious status quo at Al Aqsa mosque, accusations which Israeli authorities have denied.
Al Aqsa mosque is revered by Muslims as a Noble Sanctuary and by Jews as the Temple Mount.
Israeli security forces killed two Palestinian youths at an East Jerusalem Refugee Camp on Saturday, one of whom reportedly injured two ultra-Orthodox Jewish men in a knife attack, an Israeli spokesman said, as violence rages in the occupied West Bank and East Jerusalem.
A senior political leader of Hamas, Ismail Haniyeh, has called for an 'intifada' - an acronym for uprising in Arabic - against the Israeli occupation.
“We are calling for the strengthening and increasing of the intifada… It is the only path that will lead to liberation,” Ismail Haniyeh said during weekly Muslim prayers at a mosque in Gaza City.
“Gaza will fulfill its role in the Jerusalem intifada and it is more than ready for confrontation,” he added.