Intensive Israeli shelling killed at least 35 people and wounded more than 150 in southern Gaza Friday, medics said, shattering a fragile truce only hours after it began.

AFP correspondents said an artillery barrage of the city of Rafah was ongoing, preventing medics from recovering the dead and wounded, after the army said militants had resumed rocket fire against Israel.

Gaza militants fired rockets and shells over the border as a three-day ceasefire that began at 8am (0500 GMT) was shattered.

An AFP correspondent reported fierce fighting in the Rafah area, and Israel's army warned residents to stay in their houses as it "pursued terrorist elements."