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IDF Chief of General Staff Lt.-Gen. Dan Halutz said Wednesday in a meeting of the security cabinet that striking Hamas' military wing would bring an end to Kassam fire on Israeli communities.
Thus far, Halutz said, the army had barely acted against Hamas.
During Wednesday's meeting, the Security Cabinet called for prolonged and gradual military action in Gaza and the West Bank, as well as discussing the crisis over the kidnapping of IDF Cpl. Gilad Shalit and how to respond to Tuesday's rocket attack on Ashkelon.
A communique issued after the meeting said that in light of the kidnapping and the continuation of the rocket fire on Israel, "preparations will be made to bring about a change in the rules of the game and mode of operating with the Palestinian Authority and Hamas."
The security cabinet approved the following steps:
Striking out at Hamas in Gaza and Judea and Samaria, with an emphasis on hitting institutions and infrastructure that "serve terrorism."
Continuing operations against Kassam rocket fire.
Reducing terrorists' freedom of movement by "bisecting" the Gaza Strip.
Maintaining diplomatic pressure on Syria to ensure Shalit's release.
The statement said this would be done while trying to prevent Palestinian civilian casualties as much as possible and ensuring that the humanitarian needs of the population will be met.
Immediately after the security cabinet meeting, Olmert held consultations with Defense Minister Amir Peretz and top security officials to approve the operative steps to achieve these goals.
Simultaneously, the IDF was gearing up for large incursion into northern Gaza through the Erez crossing. Armored vehicles were stationed at Mefalsim and were being loaded on to trucks.
The IDF has been given the green light to enter residential areas, but will not reoccupy the Gaza Strip, an official at the meeting said. A buffer zone will be created in the northern part of the Strip in order to prevent Kassam fire.
Prior to the meeting, Prime Minister Ehud Olmert issued a warning to the Hamas-led government. "[The firing of a Kassam at Ashkelon] is a major escalation that Hamas is responsible for," said Olmert. "The criminal attempt to hurt Israeli citizens will be met with an extraordinary response and the Hamas movement will be the first to feel it," added the prime minister.
The rocket fired Tuesday night traveled 12 kilometers before landing in Ashkelon.
Ashkelon Mayor Roni Mehatzri said that the city's 120,000 residents could not continue to be under threat. "This is a new situation," said Mehatzri, adding, "Although we knew there was chance this would happen, it still surprised us. Our circumstances have now changed," he added.
The security establishment was set to decide whether to comply with the requests of the Ashkelon Municipality and introduce a Kassam rocket early warning system modeled on the Red Dawn system currently used in Sderot. The IDF had previously turned down the request, claiming it was liable to create unnecessary panic among residents.
Defense Minister Amir Peretz ordered the IDF to increase its activities in the Gaza Strip as part of "Operation Summer Rains."
Peretz stressed that one of the goals of the operation was to "remove the threat of Kassams."
Ze'ev Boim, a member of the cabinet said, "as far as I'm concerned, the people of (northern Gaza towns) Beit Hanoun and Beit Lahiya can start packing."
Security Cabinet member Binyamin Ben-Eliezer said the only solution to the Kassam crisis is continued targeted assassinations, while speaking to Army Radio on Wednesday morning.
"The only thing that changed the picture was when we went to the terror leaders - when we removed Sheikh Ahmed Yassin and Abdel Aziz Rantisi - then the picture began changing. Then they understood that no one is immune."
MK Ephraim Sneh (Labor), former deputy defense minister, said that there was "no escape from prolonged ground presence at the launch sites."
Responding to a comment by his Army Radio interviewer that the Palestinians had been launching Kassams in spite of an IDF presence in the Gaza Strip, Sneh said that the government must provide Israel with maximum protection.
"If you want to tell your citizens: I did the maximum," he said, "then this is the maximum."
As for the target of Israeli pressure, Sneh noted that the Hamas leadership in Damascus was behind the recent attacks. He asserted that the Hamas military wing did not listen to Palestinian Authority Prime Minister Ismail Haniyeh, but rather to Khaled Mashaal in Syria.
AP contributed to this report