Israel bombed Gaza on Wednesday morning after rocket fire from the territory coinciding with Prime Minister Benjamin Netanyahu's signing of normalisation deals with the UAE and Bahrain in Washington.

At least two rockets were fired from the Gaza Strip the previous evening, one of which was intercepted by Israel's Iron Dome anti-missile system.

The other crashed into the southern coastal city of Ashdod, lightly wounding at least two people, emergency services said.

The Israel Defence Forces said their fighter jets responded with air strikes on military targets belonging to Hamas, which controls the Gaza Strip.

There was no immediate claim of responsibility for the rocket fire from the various Palestinian factions operating in Gaza.

But the IDF levelled blame at Hamas and warned that it would "bear the consequences for terror activity against Israeli civilians".

The rocket attack came as the United Arab Emirates and Bahrain signed accords establishing diplomatic relations with the Jewish state, prompting demonstrations in the Palestinian territories.

Clutching Palestinian flags and wearing blue face masks for protection against coronavirus, demonstrators rallied in the West Bank cities of Nablus and Hebron and in Gaza.

Hundreds also took part in a demonstration in Ramallah, home of the Palestinian Authority (PA).

Palestinian president Mahmud Abbas warned that the deals would "not achieve peace in the region" until the US and Israel acknowledged his people's right to a state.

"Peace, security and stability will not be achieved in the region until the Israeli occupation ends," he said.

The normalisation by the UAE and Bahrain breaks with decades of consensus within the Arab world that an Israeli-Palestinian peace deal is a prerequisite for establishing ties with the Jewish state.

Abbas warned that "attempts to bypass the Palestinian people and its leadership, represented by the Palestine Liberation Organisation, will have dangerous consequences".

In Gaza, protesters trampled on and set fire to placards bearing images of the leaders of Israel, the UAE and Bahrain.

That latest rocket fire came after a month in which militants in the strip had stepped up incendiary balloon attacks against Israel, which responded with nighttime air strikes against Hamas.

The two sides last month reached a Qatari-mediated deal to end hostilities and revive a fragile 18-month truce.

Hamas has joined the PA in condemning the UAE and Bahraini accords as a "betrayal" of their cause.