The escalation - the worst since Israel pulled out of Gaza nearly two weeks ago - was set off by a deadly explosion on Friday at a Hamas rally in the crowded Jebaliya refugee camp.

The exact casualty toll at the rally remained unclear on Saturday. Doctors at two Gaza hospitals said they had 15 bodies in their morgues and treated 83 wounded. The Palestinian Health Ministry counted 17 dead and 140 wounded, with the higher toll possibly a result of double registration during the initial chaos.

Hamas blamed Israel for the blast and said it fired rockets on Israeli border towns in retaliation.

However, the Palestinian Authority held the Islamic militants responsible, saying they apparently mishandled explosives, and renewed demands that armed groups stop flaunting their weapons in public. The explosion went off near a pickup truck carrying Hamas militants and homemade rockets.

The deadly rally appeared to put Hamas on the defensive for the first time since the Israeli pullout, and gave Palestinian leader Mahmoud Abbas greater leverage to enforce a weapons ban.

The Islamic militants had taken center stage after Israel’s withdrawal, holding military-style victory parades, and many Palestinians endorsed the militants’ claim that they had driven Israel out by force.

However, Israel’s response to the rocket fire caused new hardships for the Palestinians, and Hamas could be held responsible. Israel’s open-ended closure of the West Bank and Gaza, imposed Saturday, means thousands of Palestinian laborers won’t be able to get to jobs in Israel.

Defense Minister Shaul Mofaz met with the army chief, Lt. Gen. Dan Halutz, and the head of the Shin Bet security service, Yuval Diskin, on Saturday to weigh Israel’s broader arsenal of responses.

Israel has said it would show “zero tolerance” for rocket attacks after its pullout from Gaza. However, it appears to have few options. Retaking Gaza is a last resort, after Israel won international accolades for giving up the territory.

Israeli Cabinet Minister Tzahi Hanegbi said the government must exact a high price and establish a “balance of fear” along its border with Gaza. Hanegbi said a ground operation was not likely now, but should be considered if rocket attacks persist. The Israeli military demanded that the Palestinian Authority do more to stop rocket fire.

Friday’s explosion brought a terrified end to one of the last victory rallies by armed militants celebrating Israel’s Gaza pullout before an agreement not to publicly parade weapons is to take effect Saturday night.

Abbas’ ruling Fatah movement cancelled a final rally it had planned for Saturday.

The Fatah Central Committee said after a four-hour meeting late Friday that Hamas is responsible for the bloodshed at the rally. Fatah “calls on all Palestinian factions to stop all types of military parades and to keep all kinds of weapons out of residential neighborhood,” the group said in a statement.

The exact circumstances of the blast remained unclear Saturday.

Hazem Abu Rashad, 18, who participated in the rally, said that “there was smoke all over, and then we saw people in pieces, but we couldn’t make out what really happened.”

Abu Rashad, who was just meters from the explosion, said three militants with two homemade rockets were in the truck’s bed. Three or four other militants rode inside as teenagers thronged the vehicle, he said.

Hospital doctors said 10 of the 15 bodies had been identified Saturday. They said three were Hamas militants, two were children, and the remainder Hamas supporters.

The blast sent a huge plume of smoke into the air. After initial confusion, people began running away and gunmen fired shots in the air. Men carried bloody body parts and lifeless bodies wrapped in blankets to nearby cars. At Shifa Hospital in Gaza, doctors had to treat patients on the floor of the emergency room because they ran out of beds. Masked Hamas men wheeled in casualties, including children.

Hamas immediately blamed Israel for the explosion, saying an Israeli aircraft targeted the militants with a missile. “We will avenge the blood of our martyrs,” said Nizar Rayan, a Hamas leader.

The Palestinian Interior Ministry issued a statement calling on Hamas “to shoulder its responsibility for these ... explosions instead of making accusations against others.”

Following the explosion, Gaza militants launched 21 homemade rockets into Israeli towns, and five Israelis were injured.

Israel responded with three airstrikes in Gaza that lightly wounded three people, according to Palestinian health officials. The strikes were the first such attacks since Israel’s withdrawal.

The army said the air strikes targeted a Hamas weapons warehouse in Jebaliya and a weapons factory and weapons warehouse in Gaza City.

One missile landed in an empty field near an abandoned weapons workshop in Gaza City, according to security officials. The second airstrike hit a garage outside the house of a Hamas fighter. The third landed outside the house of an Islamic Jihad militant in Gaza City.