A fresh wave of fighting erupted between Israeli forces and Palestinian militants in the Gaza Strip on Sunday, leaving an Israeli soldier and seven Palestinians dead, just as Israel and Gaza's Hamas rulers had appeared to be making progress toward ratcheting down months of border violence.

It was not immediately clear what set off the sudden, rare late-night burst of violence.

In a statement early Monday, the Israeli military said an officer was killed and another one was moderately injured during 'an operational activity' in southeast Gaza Strip in which an exchange of gunfire was evolved. The operation had ended and the families of the soldiers were notified, it added.

Earlier, Hamas' armed wing, the Qassam Brigades, said Israeli undercover forces in a civilian vehicle infiltrated three kilometers (two miles) into Gaza and fatally shot Nour el-Deen Baraka, its local commander in Khan Younis town. It said militants discovered the car and chased it down, prompting Israeli airstrikes that killed 'a number of people.' The clashes cooled down early Monday.

The Israeli military reported earlier that 'all IDF soldiers back in Israel.' It did not elaborate.

The Palestinian Health Ministry said six people, including at least five militants, were killed and seven others wounded. In the early hours, a seventh body was found.

In Israel, the military said it had intercepted two rockets fired from Gaza as air raid sirens continued to sound.

Prime Minister Benjamin Netanyahu, on an official visit to France, announced he was rushing back to Israel to deal with the crisis.

Sunday's development shattered what appeared to be a turning point after months of bloodshed along the Israel-Gaza border, with weekly Hamas-led protests drawing thousands to the perimeter fence with Israel. Over 170 Palestinians have been killed by Israeli fire in the border protests, in which Palestinians throw rocks, burning tires and grenades toward Israeli troops.

Last week, Israel allowed Qatar to deliver $15 million in aid to Gaza's cash-strapped Hamas rulers. Hamas responded by lowering the intensity of Friday's border protest.

Earlier Sunday, Netanyahu had defended his decision to allow the transfer of the Qatari money, rejecting criticism that the move had strengthened the Islamic militant group.

Netanyahu told reporters that it was 'the right step' at the moment and that he was committed to restoring quiet along the Israel-Gaza frontier and preventing a humanitarian crisis in the coastal Palestinian territory.

'Every action, without exception, has a price,' he said. 'If you can't handle the price you cannot lead. And I can handle the price.'

Israeli critics, including members of Netanyahu's hard-line coalition, accused him of capitulating to violence and of granting relief to the embattled Hamas group.

The internationally backed Palestinian President Mahmoud Abbas, whose forces lost control of Gaza to Hamas in 2007, angrily accused the U.S. and Israel of being involved in a 'conspiracy' to permanently sever Gaza from the West Bank. He promised to take unspecified measures against his Hamas rivals in the coming days.

Hamas leaders in Gaza have described the arrival of the $15 million, delivered last week in three suitcases by a Qatari diplomat, as their first major gain of more than seven months of weekly protests along the perimeter fence.

Hamas has been leading the protests since March 30 in a bid to ease a crippling Israeli-Egyptian blockade that was imposed in 2007 in order to weaken the militant group. The blockade has led to over 50 percent unemployment and chronic power outages, and prevents most Gazans from being able to leave the tiny territory.

Israel says it is defending its border against militant infiltrations, but its army has come under international criticism because of the large number of unarmed protesters who have been shot.

With Hamas threatening to intensify the protests and international officials warning of a looming humanitarian crisis, Netanyahu on Thursday allowed the cash into Gaza. It is the first installment of $90 million that Qatar has pledged to cover the salaries of thousands of unpaid Hamas employees for six months.

Israeli opposition figures lambasted Netanyahu for appearing to cave in to violence. Army Radio played decade-old sound clips of Netanyahu, from when he was the opposition leader, threatening tough action against Hamas and criticizing his predecessor for being too soft.

Even his erstwhile allies attacked him for indirectly doing business with a militant group that has fought three wars against Israel and is sworn to Israel's destruction.

'Everyone knows where that money is going to go ultimately,' said Netanyahu's agriculture minister, Uri Ariel.

But in comments to reporters before traveling to Paris, Netanyahu said it was a 'question of alternatives.' He said the step was coordinated with security officials to restore quiet for Israeli citizens living near the Gaza border and to avert a humanitarian crisis.

Later, at a press conference in Paris, when asked about his longer-term vision for Gaza, Netanyahu said there could be no political resolution as long as Hamas is in power.

'You can't have a political resolution with those who are committed to your dissolution, to your destruction. That's absurd,' he said. The alternative is to 'do the minimal things necessary to maintain our security and to prevent the collapse of the humanitarian situation,' he added.

The payment is part of what is expected to be a set of informal understandings between Israel and Hamas reached through Egyptian and U.N. mediation.

Hamas is demanding an expansion of the permissible fishing zone off the Israeli-controlled Gaza coast, uninterrupted flow of fuel to mitigate chronic power shortages and the lifting of Israeli restrictions on exports and imports. In return, Israel wants quiet and an end to the border protests.

For the second week in a row, the Palestinians kept Friday's protests carefully restrained, burning fewer tires and refraining from breaching the fence.

In the West Bank, Abbas angrily accused Israel and the U.S. of ganging up behind his back to entrench Hamas' control over Gaza. He also accused Hamas of undermining his goal of establishing an independent Palestinian state that includes all of the West Bank and the Gaza Strip.

Abbas fears that the U.S. is preparing to float a peace plan, called the 'Deal of the Century' by President Donald Trump, which would leave Hamas in control of Gaza and give him only limited autonomy in pieces of the West Bank.

'We are going to take tough measures (against Hamas) in the coming days,' Abbas said.

'There is an American conspiracy, which is the 'Deal of the Century,' and there is an Israeli conspiracy to implement the 'Deal of the Century,'' he said. 'To my dismay, there is another conspiracy from Hamas to foil the independent state.'

Abbas, speaking at a ceremony marking the 14th anniversary of the death of Palestinian leader Yasser Arafat, did not elaborate on what steps he might take against Hamas.

Abbas has repeatedly limited financial aid to Gaza in order to pressure Hamas into returning control to him.