Israel was poised for a major military operation Sunday evening after Prime Minister Ehud Olmert laid the responsibility for Sunday morning's attack near Kerem shalom squarely on Hamas and the Palestinian Authority's shoulders. "We in Israel view the Palestinian Authority, headed by Chairman [Mahmoud] Abbas and the Palestinian government, responsible for this incident, with all that implies," Olmert said at the start of the weekly cabinet meeting held under the heavy cloud of the events at Kerem Shalom. Government officials stressed throughout the day that Hamas was actively involved in the attack, apparently laying the groundwork for an offensive against the organization that could include the targeted killing of the organization's leaders or a major ground offensive. Foreign Minister Tzipi Livni phoned her counterparts from around the world to help Israel secure the release of kidnapped soldier, Gilad Shalit. According to sources in Livni's office, she emphasized that the attack was carried out on Israeli soil, and was both planned and perpetrated by Hamas. She said that Israel expected that Abbas, who was presently in Gaza, would remain there and help resolve the crisis. She also said that Israel believed that Abbas had the military capability to "deal with the situation immediately." Abbas condemned the attack, saying it was "intolerable." According to Abbas, it was an attempt to damage the chances of reaching an international agreement. "This act has been perpetrated at a time when several officials are trying to restore calm to the region, " he added. Livni spoke to US Secretary of State Condoleezza Rice, UN Secretary-General Kofi Annan, EU foreign policy chief Javier Solana and her counterparts from Jordan, Turkey, Spain, Great Britain, France, Russia, Austria and other countries. In addition, other channels were established with Egypt to get the message through to the Palestinians. This is "yet another test" to see whether Abbas has any real influence, one senior government official said. Even before Sunday's attack, both Olmert and Defense Minister Amir Peretz said that those involved in terrorism would be held accountable by Israel, and that no one - including those in Hamas's political echelon - were "immune." Peretz and the deputy head of the Shin Bet, whose name cannot be published, told the ministers that Hamas was a full participant in the attack. The Shin Bet deputy characterized the attack the "largest, most successful and most serious" since Israel withdrew from Gaza last summer. Livni was not the only player trying to lobby the international community. Abbas issued a statement calling on the international community and the Quartet "to prevent Israel from exploiting the operation for carrying out wide aggression against the Gaza Strip." He said that such action would "be a gift for those parties who want escalation in which the Palestinian people would pay the price." At the cabinet meeting Sunday morning Peretz briefed the ministers on the attack, even as Olmert was being continuously updated on the up-to-the-minute developments. Peretz said that there were warnings of a major attack being planned that included one or all of the following components: an attack on an IDF outpost, suicide bombers, anti-tank missiles. Peretz said that the IDF's operations in recent weeks - from the killing of Jamal Abu Samadana earlier this month to the arrests on Friday in Gaza of two Hamas operatives - was linked to attempts to foil the planned attack. Warnings of an attack was also the reason why Israel closed down Kerem Shalom since Wednesday, also effectively closing the Rafah Crossing from Gaza into Egypt. The deputy Shin Bet head told the cabinet that Hamas had gone from supplying rockets to other organizations to attack Israel, to being directly responsible for attacks. He said that in recent weeks Hamas has taken part in a number of attacks, including planting explosive devices near the fence around Gaza. He said Israel had recently arrested a Hamas cell planning to kidnap IDF soldiers "in the Sinai region." He said that the Hamas leadership abroad was pulling the organization in the direction of no compromise with Abbas on the so-called Palestinian prisoners' document, while the internal Hamas leadership was a bit more flexible but "were captives in the hands of Hamas abroad." The deputy Shin Bet head said that in recent weeks Hamas ministers have smuggled some $30 million into Gaza which has slightly relived the economic hardship there and enabled the PA to pay $400 - $500 to PA workers. He said that Israel had given the Egyptians and European monitors at the Rafah Crossing information that the money was being brought in, but that they did nothing to stop it. A top EU official said last week that the European monitors are there only to supervise the crossing, not to take any police-type action like the confiscation of the suitcases filled with money. The deputy Shin Bet head added that despite press reports to the contrary, there was still a large gap between Hamas and Abbas regarding the prisoner's document that they were trying to reach agreement on. He said that Hamas had no intention of accepting the international community's three conditions for legitimacy: recognizing Israel, accepting previous agreements, and forswearing violence. He also said they were opposed to the condition in the agreement saying that "resistance" would be limited to the territories. The deputy Shin Bet head said that Israel should not get "overly excited" about this document, and that terrorist activity would continue even if the agreement was signed. He stressed that Islamic Jihad was not a party to the agreement. He also said that 10 Kassam rockets were fired at Sderot in the last 24-hours, and that these attacks were carried out by Islamic Jihad.