An Israeli raid to destroy a Gaza tunnel ignited clashes in which tank fire killed four Hamas commanders and five Israeli soldiers were wounded, officials from both sides said Friday.

In one of the deadliest flareups in Gaza since an October 2012 war, Israeli warplanes carried out an air strike after Palestinian militants lobbed between one and three mortar shells into southern Israel, though neither attack caused any further casualties.

Gaza's Hamas rulers are under increased pressure from both Israel and Egypt, which has destroyed hundreds of similar tunnels in the south of the besieged Palestinian enclave used to bring in fuel and other goods.

The closure of the Egypt tunnels forced authorities to shut down Gaza's sole electricity plant early Friday, causing widespread power outages, the Islamist movement Hamas said.

The Israeli military said the fighting erupted late Thursday night when an explosive device went off as troops were clearing a tunnel from Gaza into Israel, allegedly to be used as a springboard for militant attacks.

The blast wounded five soldiers, the army said.

In response, "the soldiers opened fire and directly hit a terrorist," and Israeli warplanes struck "an additional terror tunnel located in the southern Gaza Strip," it said.

Palestinian officials said four local commanders of Hamas's military wing, the Ezzedine al-Qassam Brigades, were killed by tank fire.

Rabieh Barikeh was killed instantly and Khaled Abu Bakr died of his wounds during the night, according to the officials, who said the commanders were carrying out surveillance along the frontier east of the town of Khan Yunis when they came under fire.

The bodies of Mohammed al-Qassas and Mohammed Daoud were discovered later.

Barikeh's funeral on Friday afternoon, the first of the four that were to take place during the day, was attended by some 2,000 Hamas supporters holding up the movement's flag and shouting "revenge against Israel."

During the exchange, Hamas TV said, three mortar shells were fired from Gaza into southern Israel, but the Israeli army reported only one, which it said fell in an open field, causing no casualties or damage.

The military said the initial operation was aimed at dismantling a section of a tunnel into Israel uncovered last month.

"This mission was imperative due to the potential to utilise the terror tunnel for future attacks against Israeli civilians," army spokesman Peter Lerner said.

The Qassam Brigades said last month that it had dug the tunnel as part of a plan to seize Israeli soldiers and hold them in exchange for imprisoned Palestinians.

The clashes came just days after Israeli warplanes raided northern Gaza in response to militants firing rockets into southern Israel.

There was no immediate claim for the rockets but similar, sporadic attacks launched from the Strip are often claimed by militant groups other than Hamas.

Sole Gaza power plant shuts down

Hamas, which seized power in Gaza in 2007, has come under intense pressure since July, when the Egyptian army destroyed hundreds of tunnels that were bringing in fuel, building supplies and other goods from the border town of Rafah.

Gaza has been under an Israeli and Egyptian blockade since the Hamas takeover.

On Friday morning, Gaza's sole power plant was shut down because of a shortage of fuel, which the Hamas-run energy authority blamed on the destruction of the tunnels.

It also accused the Western-backed Palestinian Authority of charging too much for its fuel.

"We have completely stopped the operation of (Gaza's sole) power plant this morning at 6:00 am (0400 GMT) because we don't have a single litre of fuel," Fathi el-Sheikh Khalil, the energy authority's deputy chairman, told AFP.

It said electricity from Israel covered less than 50 percent of Gaza's needs, and that the Palestinian Authority in the West Bank was charging "prohibitive taxes" on its fuel.

The Gaza plant supplies about a third of the territory's electricity needs.

The plant will remain shut until fuel supplies resume from Egypt through the tunnels or the Rafah border crossing, or from Israel if the Palestinian Authority agrees not to impose the heavy taxes," said Khalil.