(Reuters) - Israel killed the head of Islamic Jihad's rocket force and his deputy, pressing an operation that has cost 30 lives in Gaza including women and children, while Palestinian cross-border rocket salvoes inflicted a first fatality in Israel on Thursday.

Amid mediation efforts by Egypt, neither side seemed ready to douse the worst flare-up since August, now in its third day.

"We are at the height of a campaign, both offensive and defensive," Israeli Prime Minister Benjamin Netanyahu said in a videotaped statement issued during a visit to an air base.

"Whoever comes to harm us - his blood is forfeit."

The deaths of Ali Ghali and Ahmed Abu Daqqa brought to five the number of senior figures from Iranian-sponsored Islamic Jihad killed since Israel began striking Gaza early on Tuesday.

Two gunmen from a splinter group died in a separate strike on Thursday. The identities of two men killed elsewhere were not immediately clear. Four women and six children have also died.

But Islamic Jihad, the second-biggest armed group in Gaza after the ruling Hamas Islamists, kept up volleys of rockets.

"We will not retreat and the assassinations will only make us stronger. Our revenge continues," it said in a communique.

The hundreds of rockets launched have set off sirens as far north as Tel Aviv. Some 1.5 million Israelis - 16% of the population - have been ordered to shelters, military spokesperson Rear-Admiral Daniel Hagari said.

While Iron Dome and David's Sling interceptors have shot down 96% of rockets engaged, according to the military, one hit a residential building in Rehovot on Thursday. Medics said an elderly man was killed, the first person killed in Israel in the latest round of fighting, and five other people were wounded.

After more than a year of resurgent Israeli-Palestinian violence that has killed more than 140 Palestinians and at least 19 Israelis and foreigners since January, the latest escalation drew international calls for a ceasefire.

But Cairo, which hosted senior Islamic Jihad official Mohammad al-Hindi for talks, was circumspect about prospects.