(fixes typo in paragraph 12)
* Flare-up has included heaviest rocket barrage in two years
* Egypt trying to mediate calm; Israel threatens escalation
By Dan Williams and Nidal al-Mughrabi
JERUSALEM/GAZA, March 13 (Reuters) - Four rockets launched from the Gaza Strip struck Israel on Thursday despite a Egyptian-brokered ceasefire announced by Palestinian faction Islamic Jihad after the most intense cross-border violence since the 2012 war.
No one was hurt by the evening rocket salvo, the Israeli army said. With winter rainstorms keeping people indoors and Iron Dome interceptors shooting down some rockets, the two-day flare-up has been relatively free of casualties.
Israel's hardline Foreign Minister Avigdor Lieberman called for reoccupation of the enclave, an unlikely step since Prime Minister Benjamin Netanyahu reacted with measured language.
Islamic Jihad, an Iranian-backed faction that has sometimes operated independent of Gaza's Hamas government, began the barrage on Wednesday after Israel's forces killed three of its fighters a day earlier.
On Thursday afternoon, Islamic Jihad leader Khaled al-Batsh announced that the truce ending the eight-day war of November 2012 between Israel and Gaza militants would resume if the Israelis complied.
"Following intensive Egyptian contacts and efforts, the agreement for calm has been restored in accordance with understandings reached in 2012 in Cairo," he said on Facebook.
There was no public response from Israel, but a senior Defence Ministry official said earlier in the day he expected the fighting to die down soon.
Minutes before Batsh posted word of the truce, Israeli aircraft struck targets in Rafah, in southern Gaza near the border with Egypt, wounding three Palestinians, witnesses said. The Israeli military said "seven terror sites" had been hit.
On Wednesday, Israel carried out 29 air strikes and its tanks shelled militant targets in Gaza as Islamic Jihad fired 60 rockets. There were no casualties in Wednesday's exchange.
TALK OF REOCCUPATION
There was no claim in Gaza for the rockets launched after the ceasefire announcement, raising the possibility that a faction other than Islamic Jihad was responsible.
Netanyahu said Israel would "hit back with increasing force" against anyone who tried to ruin celebrations over the next few days of the Jewish holiday of Purim.
Lieberman, Netanyahu's far-right partner in the coalition government, called for Israel to retake Gaza, which it quit in 2005 after 38 years of occupation in a unilateral move that boosted Hamas and Islamic Jihad.
"The only solution to this situation of a ceaseless cycle of terror is re-occupation of Gaza and a clean-out of the stables there," Lieberman said on Facebook.
The time was ripe, he said, as the military government in Cairo has clamped down on Egypt's border with Gaza and shunned Hamas.
Palestinian sources noted that Hamas, an Islamist movement that is hostile to the Jewish state but has largely tried to maintain calm since November 2012, had not joined in the rocket attacks, an apparent sign it hoped to avoid a wider conflict.
But the sources said it had also not moved immediately to stop the launches, apparently concerned Palestinians would see it as less committed than Islamic Jihad to fighting Israel.
Islamic Jihad has strong ties with Israel's arch-foe Iran and is the second largest faction in the enclave. Smaller groups include al Qaeda-aligned militants. [ID: nL5N0IF36D]
Last week Israel's navy seized a ship in the Red Sea. Israeli officials said it was ferrying advanced rockets to Gaza, most likely to Islamic Jihad. (Editing by Jeffrey Heller and Tom Heneghan)
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