The attack triggered eight days of intense fighting in which Israel carried out some 1,500 airstrikes and Hamas and other armed groups fired a similar number of rockets into Israel. Some 161 Palestinians, including dozens of civilians were killed, in addition to five Israelis, before an Egyptian-brokered cease-fire took hold. It was the heaviest fighting since an Israeli offensive nearly four years earlier.
Under the truce, Hamas appeared to emerge as the early winner. Despite suffering heavy casualties, its military capabilities remained intact. It earned a degree of international recognition, and Egypt's then-Islamist government promised increased movement and trade with its Gazan neighbor.
A year later, however, Israel seems to have gained the upper hand. Egypt's promises to Hamas were never honored, and Islamist President Mohammed Morsi, Hamas' most important ally, was toppled in a military coup in July.
Egypt's new military rulers have greatly restricted movement across the border, preventing Gazans from leaving for studies, work and medical care. They have also destroyed the smuggling tunnels along the border that have long served as a lifeline for Gaza. Hamas' traditional ties with Iran, a long-time financial backer, have been strained because of Hamas support for rebels fighting the Iranian-backed government in Syria.
The Egyptian crackdown has led to price hikes, fuel shortages and longer daily power cuts in Gaza, and the Hamas government acknowledges it is struggling with a cash crunch. In the meantime, Hamas has honored its pledge under the cease-fire to halt rocket fire.
The Israeli military says about 50 rockets have been fired into Israel this year, compared to 1,500 the previous year. The few that have been fired have caused little damage, landing in open areas or being intercepted by the Iron Dome rocket defense system, which made a successful debut during last year's fighting.
The period of quiet has brought about a reawakening in Israel's embattled south. Children play outdoors again, real estate prices are climbing and Israelis are moving to the area in search of a better and affordable quality of life. Yet the fear of renewed hostilities always seems to be lurking in the background.
Yelin, the regional council head, said Israel's discovery last month of a pair of tunnels dug by Gaza militants into Israel reinforced those fears. "What is happening underground is a lot scarier than what is happening above ground," he said.
Alon Davidi, the new mayor of Sderot, a battle-scarred border town that has absorbed thousands of rockets over the years, said the town has seen unprecedented development. Sderot is set to open a new commuter rail to Tel Aviv, roughly 80 kilometers (50 miles) to the north, next month. But he said security remains a top concern.
"On one side, thank God, we feel that things are quieter, and that we can trust the Israeli government and the army to do what it takes to protect us," said Davidi. "On the other hand, we feel that at any time everything could blow up and can turn us back into a conflict zone."
Those concerns were illustrated with the massive display of power by Hamas on Wednesday.
Police car sirens sounded throughout the city during Wednesday's parade, while military vehicles carried huge posters of Hamas leaders killed by Israel. Policemen raised their assault rifles in tribute, and the forces displayed Palestinian flags, not green Hamas banners, to promote unity.
Hamas has ruled Gaza since ousting the forces of Western-backed President Mahmoud Abbas in 2007, who now governs in the West Bank. The sides have been unable to reconcile, leaving the two Palestinians areas divided between rival governments.
Interior Minister Fathi Hamad, who commands Hamas' security forces in Gaza, called on Arabs in the Gaza Strip, West Bank and Israel to unite in a holy war to "uproot the Jews" from Israel.
"A third intifada is approaching," he said, using the term for past Palestinian uprisings against Israel. "Liberation is coming and victory is coming."
The smaller Islamic Jihad militant group held its own rally, where 6,000 masked fighters marched through the downtown area. In a display of solidarity, top Hamas military commanders attended the parade.
Brig. Gen. Mickey Edelstein, the Israeli military's Gaza division commander, said the period of quiet is the result of Israeli deterrence, not a change in Hamas' attitudes.
On Tuesday, Israeli Prime Minister Benjamin Netanyahu visited troops stationed along the southern border with Gaza, where he boasted of a roughly 98 percent drop in militant rocket fire over the past year.
"There is no doubt that significant deterrence has been achieved," Netanyahu said. "However, we are not deluding ourselves. We know that Hamas and the other terrorist organizations are continuing to arm themselves in various ways."
