(Corrects city hosting Eurovision, paragraph 12)
* Hundreds of attacks
* Biggest flare-up in months
* U.N., Egypt trying to mediate ceasefire
* Ramadan starts on Monday
By Nidal al-Mughrabi and Jeffrey Heller
GAZA/JERUSALEM, May 5 (Reuters) - Rockets from Gaza killed three people in an Israeli city while five Palestinian militants died on Sunday in surging cross-border fighting that included a return by Israel to singling out enemy commanders for attack.
Israeli Prime Minister Benjamin Netanyahu said he ordered the military to continue "massive strikes" against Gaza's ruling Hamas group and Islamic Jihad, in the most serious border clashes since a spate of fighting in November.
Israel's military said more than 450 rockets, many intercepted by its Iron Dome anti-missile system, have been fired at southern Israeli cities and villages since Friday, and it attacked some 220 targets belonging to Gaza militant groups.
A rocket that hit a house in Ashkelon killed a 58-year-old Israeli man, police said. He was the first such Israeli civilian fatality since the seven-week-long Gaza war in 2014. Separate strikes on the southern Israeli city killed two men, a local hospital official said.
In Gaza, at least four Palestinian gunmen were killed in Israeli strikes, health officials said.
In a separate strike it described as a targeted attack, Israel's military killed Hamed Ahmed Al-Khodary, a Hamas commander. The military said he was responsible for transferring funds from Iran to armed factions in Gaza.
The air strike on his car was the first such killing of a top militant since the war five years ago. Israel had suspended such attacks in a bid to lower tensions.
SIRENS AND EXPLOSIONS
The sounds of sirens and explosions reverberated on both sides of the frontier, fraying nerves and keeping schools closed.
The latest round of violence began two days ago when an Islamic Jihad sniper fired at Israeli troops, wounding two soldiers, according to the Israeli military.
Islamic Jihad accused Israel of delaying implementation of previous understandings brokered by Egypt aimed at ending violence and easing blockaded Gaza's economic hardship.
This time, Israeli strategic affairs analysts said, both Islamic Jihad and Hamas militants appeared to believe they had some leverage to press for concessions from Israel, where independence day celebrations begin on Wednesday.
In two weeks Israel is also hosting the Eurovision Song Contest in Tel Aviv, the target of a Gaza rocket attack in March. That attack caused no damage. On Sunday sirens sounded in the city of Rehovot, 17 km (10.5 miles) southeast of Tel Aviv.