Palestinians fired two rockets into southern Israel on Tuesday, the third day of a fragile truce declared by Gaza militants, the military told AFP, adding that both were shot down by its Iron Dome air defence system.

A spokesman said that an earlier report of two additional rockets falling on open ground was incorrect.

Seven rockets have been fired at Israel since the Hamas rulers of the Gaza Strip declared a truce effective from midnight Saturday, the military said.

Prime Minister Benjamin Netanyahu said on Sunday that Israeli troops had responded "forcefully" to recent rocket fire from Gaza and could step up their response if the latest truce failed to hold.

"Regarding the situation in the south, the Israeli army acted forcefully against those who try to attack us and, if necessary, the army will act more forcefully still," Netanyahu warned at the start of a cabinet meeting.

A previous truce, announced last Wednesday, had begun to unravel, with Hamas threatening to call it off altogether before declaring a fresh attempt. (Copyright © 2012 Agence France Presse. 06/27/12)