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Israel says it has no interest is engaging in another war with Hamas, but says it will no longer tolerate the Gaza militant campaign of flying incendiary kites and balloons across the border that have ignited fires damaging Israeli farms and nature reserves.

"I call on the Israeli snipers to stop targeting children in Gaza", U.N. said peace envoy Nikolay Mladenov on Sunday, while urging the Palestinian factions in the Gaza strip and the Israeli side to retreat from "the brink of a real war" and to stop the current escalation, as reported by Anadolu Agency (AA).

The fishing zone enforced by Israel off the Gaza Strip was also reduced from six nautical miles to three.

Speaking at the same border visit, Israeli Prime Minister Benjamin Netanyahu said "the Israeli military is prepared for any scenario". Alongside the cessation of rocket fire, Israel also demanded that Hamas halt the flare-up of balloons and firebombs, but it is not clear whether the organization acceded to this demand.

"Our people's struggle will go on until they get their legitimate rights and end the unfair siege that has been imposed on the Gaza Strip for 11 years", he said.

The Israeli military deployed an Iron Dome anti-missile defence battery in the Tel Aviv area following a "situation assessment", the Israel Defence Forces said. Food, medicine and other humanitarian supplies would continue to be permitted through the crossing.

Illustrative: Gazans load balloons with flammable material to be flown toward Israel, at the Israel-Gaza border in al-Bureij, central Gaza Strip on June 14, 2018.

Hamas has denounced Israel's latest punitive measure.

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A spokesman for Israel's fire service said around 750 fires have burned some 2,600 hectares, estimating the damage at millions of shekels (hundreds of thousands of dollars or euros).

"The Israeli occupation would be playing with fire if its warplanes targeted kite flyers", he said.

Gaza militants often vacate potential target sites during flare-ups and Israelis who live in villages and towns near the border have reinforced rooms in their homes and rocket sirens that alert of an incoming attack.

Israel, the Hamas and Jihad groups had announced a ceasefire in Gaza, but Tel Aviv has kept its threat that the situation on the ground will determine whether it will hold.

"We were sitting in the living room and all of a sudden, the aquarium exploded and there was smoke everywhere and glass flew everywhere", said Aharon Buchris, who was wounded along with his wife and two teenage daughters, as he awaited surgery in hospital.

The tightening of the blockade comes after the heaviest exchange of fire between Israel and Palestinian militants in Gaza since a 2014 war on Saturday.

A young Palestinian man has died more than two months after being shot by Israeli military forces during clashes between a group of Palestinian protesters and Israeli forces in the southern part of the occupied West Bank.