"Hamas has fired 47 rockets since we suspended our strikes in Gaza (this morning). As a result, we have resumed our operation against Hamas," an Israeli military statement said on Twitter.
"After Hamas and Islamic Jihad refused the Egyptian proposal for a ceasefire and fired dozens of rockets at Israel, the prime minister and defence minister have ordered the IDF to act forcefully against the terror targets in Gaza," an Israeli official said speaking as Israeli strikes resumed.
There were no immediate reports of deaths or injuries.
The Egyptian-proposed ceasefire plan was aimed at halting Israel's deadly nine-day offensive on the Gaza Strip that has killed 192 Palestinians but the Israeli premier had warned that the operation would be intensified if Hamas militants refused to accept the truce.
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But the Palestinian militant group rejected the ceasefire proposal calling it a "surrender".
Despite Hamas' rejection of the ceasefire plan, which came into effect at 9 AM local time, there were several hours of a lull in violence since morning.
He said Israel wanted "the demilitarisation" of Gaza and would respond "with force" to any further rocket fire.
Israel's security cabinet and the coalition partners in Netanyahu's government, however, were divided on the decision to accept the ceasefire proposal with vociferous opposition raised by some key leaders.
The proposed Egyptian ceasefire plan had called for a stop to Israel's aerial and naval attacks on Gaza, specifically refraining from any ground incursion into the Strip.
So far, no Israelis have been killed in the fighting.