Five other Palestinians died in a wave of air strikes on the Gaza Strip on Wednesday, it said.
"The Israeli occupation has carried out more than 20 air strikes on targets and headquarters of the police and security in the Gaza Strip. So far, six people have been killed, including commander Ahmad Jabari," interior ministry spokesman Islam Shahwan said.
Below are reactions from across the world on the assassination and the subsequent air strikes.
United Nations
UN chief Ban Ki-moon called on Israel and Hamas fighters to prevent an escalation of hostilities in the Gaza Strip, and urged both sides to ensure civilians will be protected, a UN spokesman said.
"The Secretary-General calls for an immediate de-escalation of tensions," UN spokesman Martin Nesirky said, adding that it was a reiteration of Ban's already-stated position.
"Both sides should do everything to avoid further escalation and they must respect their obligations under international humanitarian law to ensure the protection of civilians at all times," he told reporters.
Egypt
Egypt's Foreign Minister Mohammed Kamel Amr condemned the Israeli air strikes that killed Jabari and called for an "immediate stop" to attacks on the Palestinian territory.
Amr, in a statement, warned Israel against any "escalation and its possible negative effects on regional stability".
President Mohamed Morsi's Muslim Brotherhood movement, meanwhile, urged Arabs to boycott Israel, while the movement's Freedom and Justice Party (FJP) warned that Egypt would no longer stand by as Palestinians come under attack.
The FJP said the air strikes that killed Jabari in Gaza required "swift Arab and international action to stop the massacres".
Israel "must take into account the changes in the Arab region and especially Egypt," it said. Egypt "will not allow the Palestinians to be subjected to Israeli aggression, as in the past".
Morsi, a vociferous supporter of the Palestinians before his election triumph in June, had been expected to lift a blockage of the Gaza Strip which borders Egypt, but his government has backed off from his pledges.
The Brotherhood, which has close ties with Hamas, called for an "economic boycott" and a public awareness campaign "to support the choice of resistance".
Qatar
Qatari Foreign Minister Hamad bin Jassim Al Thani condemned the attacks in the Gaza Strip and said they should not go unpunished.
"I condemn in the name of Qatar... This filthy crime must not pass without a punishment," he told journalists after a meeting in the Saudi capital between Gulf Co-operation Council Foreign Ministers and their Russian counterpart Sergei Lavrov to discuss Syria.
"The UN Security Council must shoulder its responsibilities in preserving peace and security in the world."
United Kingdom
Britain called for restraint, saying that further violence was in no one's interests.
"We are aware of reports of the death of the senior Hamas commander Ahmed Jabari," the Foreign Office said in a message posted on Twitter.
"We continue to call on all sides to exercise restraint to prevent a dangerous escalation that would be in no one's interests."
British Foreign Secretary William Hague had warned at an EU-Arab League meeting in Cairo on Tuesday that the world was "in danger of sleep walking into a serious crisis" if there was no progress on the stalled Middle East peace process.
United States
The United States threw its weight behind Israel after it launched a barrage of air strikes on the Gaza Strip, and condemned Palestinian militant rocket attacks on southern Israel.
"We support Israel's right to defend itself, and we encourage Israel to continue to take every effort to avoid civilian casualties," US State Department spokesman Mark Toner said in a statement.
"We strongly condemn the barrage of rocket fire from Gaza into southern Israel, and we regret the death and injury of innocent Israeli and Palestinian civilians caused by the ensuing violence," he added.
"There is no justification for the violence that Hamas and other terrorist organizations are employing against the people of Israel," Toner said in his statement, calling on them "to stop these cowardly acts immediately."
"Hamas claims to have the best interests of the Palestinian people at heart, yet it continues to engage in violence that is counterproductive to the Palestinian cause," he added.
"Attacking Israel on a near daily basis does nothing to help Palestinians in Gaza or to move the Palestinian people any closer to achieving self determination."
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