Defence Minister Israel Katz accused Hamas of attacking Israeli soldiers in Gaza on Tuesday, and breaching the terms on returning the bodies of deceased hostages. BBC and Aljazeera reported.
The Palestinian armed group claimed it had "no connection" to the attack and insisted it was committed to the ceasefire deal.
First responders in Gaza said at least nine Palestinians were killed in a wave of Israeli strikes across the territory on Tuesday evening.
Despite the flare-up, US Vice-President JD Vance said he believed the ceasefire was holding.
A brief statement put out by Prime Minister Netanyahu's office on Tuesday evening said he had ordered "forceful strikes" by the military but did not specify his reasons.
However, Defence Minister Katz said Hamas had crossed "a bright red line" by launching an attack on Israeli soldiers in Gaza on Tuesday.
"Hamas will pay many times over for attacking the soldiers and for violating the agreement to return the fallen hostages," he warned.
An Israeli military official said the attack took place "east of the Yellow Line", which demarcates Israeli-controlled territory inside Gaza under the ceasefire deal.
Israeli media reported that troops in the southern Gaza city of Rafah had come under anti-tank missile and sniper fire on Tuesday afternoon, while Palestinian media reported Israeli artillery shelling in the area at the same time.
Saudi Arabian Foreign Minister Prince Faisal bin Farhan Al Saud and Palestinian Prime Minister Mohammad Mustafa have met in Riyadh to discuss the situation in Gaza and the occupied West Bank
