Jabari led Hamas' 2007 takeover of the territory, turning small squads of Hamas gunmen into a fighting force and supervising Gaza's fledgling arms industry, including rocket production. He was long No. 1 on Israel's most-wanted list, particularly for his role in capturing Israeli Sgt. Gilad Schalit and holding him for more than five years.
On Thursday, Hamas gunmen fired machine guns in the air as frenzied mourners carried Jabari's body, wrapped in a white burial shroud, through the streets of Gaza City on a wooden stretcher. At the cemetery, young men surged toward the corpse, trying to touch Jabari's face before he was lowered into the grave in a chaotic scene.
Hamas' top leaders have dropped out of sight since the assassination, but it was not clear if they would be targets. The Hamas prime minister, Ismail Haniyeh, said in a televised speech Thursday that the group "will not forget and not forgive" the killing of Jabari.
Late Thursday, Hamas security said an Israeli navy vessel fired toward a building about 50 yards (meters) from Haniyeh's house, where a generator supplies electricity for the prime minister and his neighbors in Shati, a beach-front refugee camp in Gaza City. It was not clear if Haniyeh was home at the time.
In Israel, a rocket hit a four-story apartment building in the southern town of Kiryat Malachi on Thursday, killing two men and a pregnant woman. A 4-year-old boy and two babies were wounded in the attack.
Many Gazans stayed indoors and streets were largely empty, though there was no sense of widespread panic. Some said Hamas should take revenge, even at the price of further Israeli retaliation.
"If Israel strikes us, we have to strike back," said Ahmed Barakat, a 33-year-old laborer from Gaza City attending the Jabari funeral. "An eye for an eye, a tooth for a tooth."
In Jerusalem, thousands of mourners attended the funeral of Mira Scharf, a 26-year-old mother of three who was killed in Thursday's rocket strike in Israel. Israeli media said she was pregnant and had recently returned to Israel from New Delhi to give birth.
In central Tel Aviv, Adrian Cisser, a 35-year-old electrician, was in a bicycle shop when an air raid siren went off.
"People on the street started running," he said. "The public shelter nearby was locked so we just stayed in the shop, and two minutes after it started we heard this big bang."
Cisser said he had gotten a preliminary call from the army and expects to be called up for reserve duty next week.
In the southern Tel Aviv suburb of Rishon Lezion, where a Hamas rocket landed in an empty field, a siren sent people rushing for shelter.
"There is panic in our house and we can hear shouts from the street," a resident who gave her first name, Lital, told the Israeli news site YNet. "Children were running away, trying to find shelter. It was very stressful. I am shaken up."
From Israel's perspective, Hamas escalated the fighting with a pair of attacks in recent days, an explosion in a tunnel along the Israeli border and a missile attack on an Israeli military jeep that seriously wounded four soldiers.
An Israeli ground offensive could be costly to both sides. In the last Gaza war, Israel devastated large areas of the territory, setting back Hamas' fighting capabilities but also paying the price of increasing diplomatic isolation because of the high civilian casualty toll.
The current round of fighting is reminiscent of the first days of Israel's three-week offensive against Hamas that began in December 2008. At the time, Israel also caught Hamas off-guard with a barrage of missile strikes and threatened to follow up with a ground offensive.
However, much has also changed since then.
Israel has improved its missile defense systems, but is facing a more heavily armed Hamas.
Netanyahu, who has clashed even with his allies over the deadlock in Mideast peace efforts, appears to have less diplomatic leeway than his predecessor, Ehud Olmert, making a protracted military offensive harder to sustain.
The White House came out in support of Israel on Thursday, with spokesman Jay Carney saying there is "no justification" for rocket fire from Gaza and urging militants to stop "cowardly acts."
However, the regional constellation has changed dramatically since the last Gaza war. Hamas has emerged from its political isolation as its parent movement, the region-wide Muslim Brotherhood, rose to power in several countries in the wake of last year's Arab Spring uprisings, particularly in Egypt.
On Thursday, the Egyptian president ordered his prime minister, Hesham Kandil, to lead a senior delegation to Gaza on Friday in a show of support for Hamas. Morsi has called Israel's campaign against Hamas "unacceptable" and has recalled Egypt's ambassador to Israel in protest.
Conflict at a glance
Militants in the Hamas-ruled Gaza Strip killed three Israeli civilians on Thursday in a rocket attack on a residential area.
The Israeli military has killed 19 Palestinians, both militants and civilians, in Gaza since the operation started Wednesday.
The Israeli military says it has hit more than 340 targets since the offensive began.
It also says Gaza militants fired around 450 rockets at Israel since the start of the operation. Three rockets targeted the densely populated Tel Aviv area.
Israel says its Iron Dome missile defense system has intercepted about 130 of those rockets.
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