Israeli aircraft struck a Palestinian rocket squad in the Gaza Strip on Sunday, as a new defense system to protect southern Israel from militants' rockets prepared to go online after years of development, the military said.

Two Islamic Jihad militants were killed in the attack and one was critically wounded, said the group, which did not specify whether they were in the process of launching rockets.

Gaza militants, including Islamic Jihad and the territory's Hamas rulers, had said over the weekend that they would cease fire if Israel did. It was not clear whether they were reneging on that pledge or whether the air strike hit a rogue group of militants ignoring the cease fire.

Weeks of stepped-up rocket and mortar attacks have drawn fears of renewed war and led to new calls in Israel for the military to deploy the $200 million Iron Dome anti-rocket system.

The Israeli military said the system should begin operating on Sunday near Beersheba, southern Israel's largest city. A second anti-missile battery will be deployed in another large southern city, Ashdod, the military added, without specifying an exact date.

Security officials said the new spate of rocket attacks from Gaza and public pressure had led the military to deploy the system, which is still being fine-tuned. They spoke on condition of anonymity because they were not authorized to discuss operational decisions.

Gaza militants, including Islamic Jihad and the territory's Hamas rulers, had said over the weekend that they would cease fire if Israel did. A major problem with that pledge is the inability of the larger groups to control rogue militants from attacking.

Israel has said it does not want the violence to escalate.

Israeli defense officials' earlier failures to deploy the $200 million Iron Dome anti-rocket system against the Palestinian attacks had raised many questions in Israel about its effectiveness. Home Front Minister Matan Vilnai told Army Radio on Sunday that even once it was deployed, the Iron Dome would still not provide full protection to residents of Israel's south.

Defense Minister Ehud Barak announced last week that the new system was being put into place but gave no exact date for when it would start operating.

Israel developed the system to protect itself from short-range rockets used against it by Palestinian militants to its south in Gaza and Hezbollah guerrillas to the north in Lebanon.

Millions of Israeli civilians are within rocket range.

The Iron Dome system uses cameras and radar to track incoming rockets and is supposed to shoot them down within seconds of their launch.

The renewed violence had fed concerns of a repeat of Israel's December 2008 invasion of Gaza in response to years of rocket and mortar barrages on its southern communities.

Hundreds of civilians were among the 1,400 Palestinians killed, and widespread damage was caused to homes and businesses. Thirteen Israelis also died.