The fighting occurred some eight hours before a temporary truce was set to expire. Egypt had persuaded Israel and Egypt to extend the truce by 24 hours to give more times for the negotiations.
While there were no injuries reported in Israel or Gaza, it remained unclear whether the talks in Egypt would continue.
"This rocket attack on Beersheba is a grave and direction violation of the cease-fire," Israeli government spokesman Mark Regev said. He refused to say whether Israel would halt the negotiations, but Israel has repeatedly said it will only negotiate if there is a "total and complete" cease-fire.
The Israeli military said Gaza militants fired three rockets into Israel that landed in open areas near the southern city of Beersheba. Hamas police officials said seven Israeli airstrikes targeted open areas.
Within minutes, it said it carried out a series of airstrikes. It accused militants of violating the cease-fire and said it maintains "both defense and striking capabilities in order to address the renewed aggression."
The rocket fire broke a nearly weeklong lull that has held during the Egyptian-mediated negotiations.
There was no immediate claim of responsibility. But shortly before the launch, Hamas spokesman Fawzi Barhoum hinted of more rocket fire, saying: "If Netanyahu doesn't understand ... the language of politics in Cairo, we know how to make him understand."
The effect the violence will have on the negotiations in Cairo was not immediately clear. Earlier Tuesday, Palestinian and Israeli negotiators had resumed their indirect talks after agreeing to the 24-hour extension.
The negotiations are aimed at working out a long-term arrangement between Israel and Hamas following weeks of fighting that has killed some 2,000 Palestinians, most of them civilians, and left tens of thousands more homeless. Sixty-seven Israelis have died, all but three of them soldiers.
Hamas is seeking an end to a seven-year Israeli-Egypt blockade that has ravaged Gaza's economy. Israel wants Hamas to disarm. An Egyptian compromise proposal calls for easing the blockade, but not lifting it. And while Hamas would not be required to give up its arsenal, the Egyptian plan would give Western-backed President Mahmoud Abbas, whose forces were ousted by Hamas in 2007, a foothold back in Gaza, running border crossings and overseeing internationally-backed reconstruction.
In an apparent attempt to pressure Hamas, Egypt said early Monday it would co-host an international fundraising conference for Gaza - but only if a deal is reached first.
That appears to play into the hands of the Abbas' Palestinian Authority, which is eager to regain control of Gaza.
Hamas finds itself pressured by both Egypt and the Palestinian Authority to accept a less than perfect deal with Israel, but needs to show the people of Gaza that the enormous sacrifices they endured in the fighting were not in vain.
There were few signs of any major breakthroughs.
A member of the Palestinian delegation said that Israel was offering to ease the Gaza blockade by opening border crossings to some goods and people, but was insisting that it retain the right to limit the imports of material like cement, and chemical and metal products, which Israel says can be used for weapons manufacturing.
Hamas fears the arrangement would allow Israel to retain the right to close the crossings whenever it wished and is pushing for more Palestinian input into such decisions.
The Palestinian official also told The Associated Press that Israel wants to put off for an unspecified date any discussion on the opening of a Gaza seaport and airport and the release of Palestinian prisoners held in Israeli jails.
The Palestinians, however, say they will only agree to postpone discussing the seaport and airport for "a month after a cease-fire agreement, with other issues like .... the prisoners," the official said. He spoke condition of anonymity because he was not authorized to discuss negotiations with journalists.
He also said that Israel agrees to extend the maritime territory in which Gaza fisherman can venture out from two to four kilometers (three to six miles) and eventually to 19 kilometers (12 miles) from the shore, but that it was standing firm against Hamas' demand for unsupervised exports from the strip.
The Gaza blockade, imposed after Hamas seized control of the territory in 2007, has greatly limited the movement of Palestinians in and out of the territory of 1.8 million people, restricted the flow of goods into Gaza and blocked virtually all exports.
Israel says the blockade is needed to prevent arms smuggling, but critics say the measures have amounted to collective punishment.
Jamal Shobaky, the Palestinian ambassador in Cairo voiced disappointment with the Israeli stance, particularly on the question of the blockade. "What the Israelis have offered so far in the talks is not removing the blockade but rather easing it," he said.
The latest round of Gaza fighting was precipitated by massive Israeli arrests of Hamas members in the West Bank in the aftermath of the abduction and killing of three Israeli teenagers in June. Their deaths were followed by the slaying of a Palestinian youth in Jerusalem in what was a likely revenge attack.
Associated Press writers Mohammed Daraghmeh in Cairo and Ibrahim Barzak in Gaza City, Gaza Strip, contributed to this report.