* Israeli air strike on house kills five - health officials
* Comes after Palestinian mortar bomb kills Israeli boy
By Nidal al-Mughrabi and Maayan Lubell
GAZA/JERUSALEM, Aug 23 (Reuters) - Israeli aircraft bombed the Gaza Strip on Saturday and Palestinian militants fired rockets at the Jewish state, the military said, with no end in sight to the deadliest violence between the sides in years.
Gaza health officials said five people were killed in an Israeli strike on a house in central Gaza. The Israeli military said it bombed about 20 targets across the Hamas-dominated strip, including rocket launchers and weapon caches.
Israeli Prime Minister Benjamin Netanyahu on Friday threatened to escalate the fight against Hamas, vowing the militant group would "pay a heavy price" after a four-year-old Israeli boy was killed by a mortar attack from Gaza.
Indirect negotiations between Israel and Gaza militant groups to end the conflict, brokered by Egypt, collapsed on Tuesday with no sign of any resumption ahead.
The Israeli military said Palestinian gunmen had fired almost 500 rockets at Israel since the talks broke down and Gaza health officials said 65 Palestinians had been killed in Israeli air strikes since then.
Palestinian health officials say 2,076 people, many of them civilians, have been killed in Gaza since July 8, when Israel launched an offensive with the declared aim of ending rocket fire into its territory.
The boy killed on Friday was the first Israeli child to have died in the conflict, bringing to four the number of civilians killed in Israel. Sixty-four Israeli soldiers have also been killed in the fighting.
The Israeli military had said on Friday the mortar was fired from a school serving as a U.N. shelter, but later retracted that statement, saying the shelter was run by Hamas.
On Friday Hamas-led gunmen in Gaza executed 18 Palestinians accused of collaborating with Israel. The Independent Commission for Human Rights (ICHR), a Palestinian rights group, said there were two women among those killed.
Masked militants dressed in black executed seven suspected collaborators, shooting the hooded and bound victims in a busy square outside a mosque. The deaths followed the killing of 11 alleged informers at an abandoned police station.
The crackdown on suspected collaborators followed the killing of three of Hamas's most senior military commanders in an Israeli air strike on Thursday, an attack that required precise on-the-ground intelligence on their whereabouts.
On Friday, Israel's military spokesman Brig. Gen. Motti Almoz warned Palestinians near weapons stockpiles in Gaza to leave their homes. "We are intensifying our attacks," he said, adding that Israel was "preparing for possible ground action".
Israel pulled ground forces out of Gaza more than two weeks ago after saying it had destroyed a network of Hamas tunnels used for cross-border ambushes. But Netanyahu last week granted provisional approval for the call-up of 10,000 army reservists, signalling the possibility of heightened military action.
Israeli attacks in the densely-populated Gaza Strip have devastated many areas in the impoverished enclave, home to 1.8 million Palestinians.
The United Nations says about 400,000 Gazans have been displaced and more than 400 children killed in the longest and deadliest violence between Israel and the Palestinians since the second Intifada, or Palestinian uprising, a decade ago. (Writing by Maayan Lubell; Editing by Pravin Char)