The worst escalation between Israel and Palestinian fighters in Gaza since the 2014 war threatened to plunge the coastal enclave into another full-blown conflict on Tuesday as global mediators raced to pull both sides "back from the brink".
Al-Qassam agents stopped it and wanted to search it, realised it was an Israeli operation and confronted them, it said in a statement.
Just this morning Netanyahu said he wanted "calm" but Israeli military conducts strikes on Gaza breaking cease-fire.
Six Palestinians were killed in Gaza in less than 24 hours as Israeli strikes targeted militants and flattened buildings while sending fireballs and plumes of smoke into the sky.
The dead man was identified on Tuesday afternoon as Mahmoud Abu Asbah, 48, a Palestinian from West Bank town of Halhul, north of Hebron.
The fierce clashes came after a botched undercover Israeli raid that left one Hamas commander, six fellow fighters and an Israeli officer dead, after the group's fighters discovered Israeli special forces in a civilian auto near the southern Gazan city of Khan Younis.
Palestinian fighters in Gaza, including Hamas, issued a joint statement on Tuesday announcing an Egyptian-brokered ceasefire with Israel. Under worldwide humanitarian law, all sides in a conflict have a clear obligation to protect the lives of civilians caught up in the hostilities.
Iron Dome anti-missile batteries intercepted most of the rockets, while others struck homes in several communities causing property damage and injuries and setting fires.
Israeli aircraft destroyed Hamas' al-Aqsa TV building in the Gaza Strip on Monday after a series of warning shots.
A statement from the Izzedine al-Qassam Brigades, Hamas's military wing, said the Israeli team was two miles inside Gaza in a civilian auto when the fight broke out.More news: Xbox Acquires Wasteland, Bard's Tale Studio InXile Entertainment
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Israeli gunfire has killed more than 220 Palestinians since the start of the demonstrations, which have included breaches of Israel's border fence.
Islamic Jihad spokesman Daoud Shehab said the groups made a decision to retaliate for the deadly Israeli incursion "so the occupation and its supporters know that the lives of our sons come with a price".
Why are Israel and Hamas enemies?
Israel's military said it was carrying out air strikes "throughout the Gaza Strip" on Monday after rocket fire from the Palestinian enclave towards its territory. An Israeli Druze lieutenant colonel in the elite Maglan unit, a commando brigade, was killed in the clash, and was hailed as a national hero at his funeral Monday.
More than 150 military targets have been destroyed by Israeli jets but "there is ample room for additional targets", IDF spokesperson Lt. Col. Jonathan Conricus said.
In addition, IDF naval forces attacked a vessel belonging to the Hamas naval force at Ma'agan Nuseirat in the southern Gaza Strip.
It was not clear if the burst of violence would derail the arrangements which are aimed at preventing a further deterioration of conditions in Gaza, under blockade by Israel and Egypt since a 2007 Hamas takeover.
Egypt, which borders Gaza to the south, urged Israel to back down.
Israel and Hamas have traded tit-for-tat attacks regularly during the past few months, often when Hamas launches rockets in response to lethal Israeli army fire on weekly protests at the frontier - where Palestinians have been calling for an end to the blockade - or on Hamas positions after.