Israel needs to prepare for a lengthy campaign in Gaza to stop the Kassam fire, Prime Minister Ehud Olmert told the cabinet Sunday, hinting that neither internal Palestinian agreements nor an end to the rocket barrages would necessarily bring a halt to the IDF's operations there. Olmert's comments came within hours of the death of Oshri Oz in Sderot, the second Israeli to be killed there in a week. "We need to be prepared to deal with this in the long-term," Olmert told the ministers. "This is a long-term conflict." "We will not coordinate our actions according to when Hamas starts or stops its fire," he said, a clear indication that Jerusalem wants to break the present pattern where Hamas dictates the rhythm of events. "Nobody will have immunity." The prime minister added in the same breath that he would not let the Palestinians know whether this meant that Israel would target Hamas political leaders. "I have no intention of letting them know what I intend to do," he said. The cabinet meeting included security briefings from Shin Bet (Israel Security Agency) head Yuval Diskin, and the director-general of the Defense Ministry, Pinchas Buchris. Olmert announced that he had signed an order declaring all communities within several kilometers of Sderot to be frontline communities. The order, which must be approved by the Knesset Finance Committee, would compensate business owners for indirect damages from Kassam rocket fire, and would remain in effect until August, depending on events in the field. The radius includes 51 towns and agricultural settlements, and reaches to Ashkelon's southern industrial zone. Olmert said the visit to Sderot last week by EU foreign policy chief Javier Solana contributed a great deal to Israel's public diplomacy efforts. Solana went there on Monday evening with Foreign Minister Tzipi Livni, and was in town when a Kassam slammed into Sderot's commercial area, killing Shirel Friedman, 32. Too often, Olmert said, the international community determined its position on this conflict by merely keeping score of the casualties on each side. The prime minister also said it was interesting to hear that both the Egyptians and the Saudis were telling Hamas that if they stopped firing on Israeli cites, Israel would stop firing back. Regarding the Israeli military steps, Olmert quoted the Egyptians and Saudis as saying, "What do you expect? You are firing on their cities." Diskin told the cabinet that the IDF operations inside the Gaza Strip had begun have an impact, something apparent in the fact that various Hamas factions were talking about the need for a cease-fire, and that polls conducted inside Gaza showed that the population was increasingly frustrated with its miserable economic situation, and did not believe that the Kassam rockets served Palestinian interests. The same polls, however, showed that the population was interested in "revenge attacks" on Israel, whom they viewed as responsible for their woes. According to Diskin, Hamas was being hurt not only because it was losing popular support, but also because it was physically being harmed. According to figures given by Defense Minister Amir Peretz, 59 Palestinians, among them nine civilians, had been killed in recent IDF attacks. He said the army was not only going after those who fired the Kassam rockets, but also Hamas's 6,000 to 8,000-strong Executive Force. Diskin told the cabinet there had been a decline in the number of Kassams fired at the western Negev in recent days because of the difficulty the terrorists were having in moving their rockets around. While the Palestinians had the ability to fire at Ashkelon, Diskin said, for tactical reasons they were choosing not to do so at the present time, preferring to keep that for what they felt warranted a "major" Palestinian reaction. Diskin also said Hamas was preparing for an IDF ground assault by readying snipers, suicide bombers and booby-trapped tunnels. He also said that Hamas, taking a page out of Hizbullah's playbook, was increasingly firing from built-up residential areas rather than from orchards, sometime even firing from homes with a courtyard that had a retractable roof. Nevertheless, he said, the number of people killed in "collateral damage" was far less now than it was two years ago, when approximately one Palestinian civilian was killed for every Hamas or Islamic Jihad terrorist. He said that both the Shin Bet and the IDF were well aware of the need to prevent collateral deaths. Buchris gave the cabinet figures on the number of people whom the government had temporarily removed from Sderot, saying that in the last 10 days the Defense Ministry evacuated some 3,100 people, of which 1,300 have since returned to the town. In addition, 500 to 750 people were believed to be temporarily living in the tent city set up by billionaire Arkadi Gaydamak in Tel Aviv. Gaydamak is also believed to have put up another 1,500 to 2,000 Sderot residents in hotels around the country. Buchris said the Defense Ministry was in the process of building some 200 secure rooms a month for single-unit homes in Sderot, at a cost of about NIS 100,000 each.