The head of Hamas in Gaza, Ismail Haniya, on Thursday threatened to escalate the latest outbreak of fighting with Israel after both sides once again traded fire overnight.

“We are only at the beginning of the struggle,’’ Haniya said, according to Palestinian news agency Ma’an.

“Just as we defeated the so-called march of flags, we will defeat the policy of intrusion on the Noble Sanctuary/Temple Mount.’’

Israeli police on Wednesday stopped a flag march by right-wing nationalist Israelis who planned to trace the walls of Jerusalem’s Old City.

Militant Palestinian organisations had earlier issued strong warnings against holding the rally in the divided city.

Israel’s next steps will affect “all strategic dimensions’’ of the conflict, Haniya warned.

Gaza militants fired rockets at the Israeli border late on Wednesday and in the early hours of Thursday.

Warning sirens sounded twice in the southern part of the country, the Israeli army announced on Twitter.

After a rocket hit the border town of Sderot in the evening, a second rocket fired overnight fell short and landed in Gaza, according to Israel.

In response, the Israeli army said it shelled an underground complex in the Gaza Strip used for building rocket engines.

This, it said, would limit the Palestinians’ ability to make the projectiles.

“We hold Hamas responsible for all terrorist activities emanating from Gaza,’’ the army tweeted.

The sides have been trading fire this week amid repeated clashes between Israeli security forces and Palestinians on the Noble Sanctuary/Temple Mount in Jerusalem.

Numerous people had been injured, heightening tensions following a wave of Palestinian attacks in recent weeks. (dpa/NAN)