Gaza militants fired rockets deep into southern Israel yesterday in the latest round of violence triggered by a well-planned and co-ordinated attack that inflicted the worst death toll on Israel for more than three years.

The rocket attacks – which injured six people when one landed next to a religious college – followed Israeli air strikes on Gaza overnight that left at least eight dead, including a two-year-old and a 13-year-old Palestinian boy who was buried in the rubble of his flattened family home.

As families of victims on both sides mourned, funerals were held for most of the eight victims of Thursday's militant onslaught near Israel's popular Red Sea resort of Eilat.

Israel accuses Gaza militant group the Popular Resistance Committees (PRC) of responsibility for the attack in Eilat, which started when gunmen opened fire on a bus crowded with soldiers and civilians. The militants then fired on private cars and exploded a roadside bomb killing six civilians and two soldiers. However, Israel insists that Hamas remains responsible for all attacks emanating from Gaza.

Among the Israeli victims named yesterday were Yosef Levi, 52, whose wife Etie was injured by a bullet in her shoulder and played dead for 90 minutes as she lay bleeding by her husband's body, according to a report in Haaretz newspaper. The funeral was also held for Staff Sergeant Moshe Naftali of Ofra, 22, who was killed in a gun battle with the militants. His commander said: "The enemy will not defeat us. We will do anything we can to follow in Moshe's footsteps."

The sense of loss was replicated in Gaza following the deaths from the Israeli reprisal attacks. Mahmoud Abu Samra, 13, – a model student, according to relatives – died inside a two-room breeze-block house in northern Gaza City which was demolished in the attack. The house was about 100 metres from a long-disused Palestinian intelligence headquarters that had been wrecked by previous bombing.

Although Israel has begun constructing a security fence along two sections of its border with Egypt, only about 10 per cent has been built, provoking criticisms that the border is all too porous to militant infiltration.