Israel's army on Sunday denied claims from Gazan authorities that an Israeli strike killed a pregnant Palestinian mother and her baby, saying errant Hamas fire was to blame for the deaths.

“The terror organisations' propaganda at its finest,” Israeli army spokesman Ronen Manelis said on Twitter.

“The mother and girl they're claiming in Gaza that were killed in an (Israeli) attack were killed by Hamas use of weapons,” he added, without providing further details.

Another Israeli military spokesman, Jonathan Conricus, told journalists later that based on intelligence “we are now confident” that the deaths were not due to an Israeli strike.

“Their unfortunate death was not a result of [Israeli] weaponry but a Hamas rocket that was fired and exploded not where it was supposed to,” he said.

The Gazan health ministry said on Saturday that Falestine Abu Arar, 37, and her 14-month-old daughter were killed by an Israeli strike that hit their home.

A severe escalation that began Saturday has seen Palestinian militants fire some 430 rockets from Gaza, Israel's army says.

Israel has responded with waves of air and tank strikes and says it is targeting only military-related sites. Four other Palestinians have been reported killed, including at least two militants. One Israeli civilian was killed in a rocket strike on the city of Ashkelon near the Gaza border.