He survived four previous attempts by Israel to kill him. In one attempt in 2004 his eldest son, his brother and three other relatives were killed.
He was credited with leading the bloody 2007 takeover of Gaza from Fatah forces, developing Hamas's military arsenal and its networks in Iran, Sudan and Lebanon and for his planning of the Schalit kidnapping. Hamas has ruled Gaza with an iron grip since then, and repeated attempts to reconcile with Fatah have failed.
The assassination threatened to further damage Israel's relations with Egypt, which is governed by Hamas' ideological counterpart, the Muslim Brotherhood.
On its official Facebook page, the Freedom and Justice Party, the Muslim Brotherhood's political arm, called the assassination a "crime that requires a quick Arab and international response to stem these massacres against the besieged Palestinian people in the Gaza Strip."
It accused Israel of trying to "drag the region toward instability."
Israel and Egypt signed a peace accord in 1979. Relations, never warm, have deteriorated since longtime Egyptian President Hosni Mubarak was ousted in a popular uprising last year.
Heller reported from Jerusalem. Additional reporting from Sarah El Deeb in Cairo.