Hizbullah is paying Palestinian splinter groups "thousands of dollars" for each Kassam rocket fired at the western Negev, The Jerusalem Post has learned. According to Israeli intelligence information, Hizbullah is smuggling cash into the Gaza Strip and paying "a number of unknown local splinter groups" for each attack. Shin Bet (Israel Security Agency) sources said the Islamist organization paid several thousand dollars for each attack, with the amount dependent on the number of Israelis killed or wounded. "We know that Hizbullah is involved in funding terrorist activity in the Gaza Strip and the West Bank," a security official said. "Palestinian terrorists get thousands of dollars per attack. Sometimes they are paid before the attack and sometimes they submit a bill to Lebanon afterward and the money gets transferred a short while later." According to the officials, while Islamic Jihad was behind most recent rocket attacks - including the one on Tuesday night that critically wounded 14-year-old Adir Basad in Sderot - several splinter terrorists groups are also involved and have received direct funding from Hizbullah. According to security officials, Islamic Jihad gets the money via its headquarters in Damascus while Fatah's Tanzim terror group and the Popular Resistance Committees receive payment from Hizbullah in Lebanon. All of the money originated in Iran, the officials said. Government officials said Hamas was not currently involved in firing missiles, but was doing nothing to stop those who were. Also Wednesday, the IDF Operations Directorate relayed new orders to the Southern Command following Prime Minister Ehud Olmert's decision earlier in the day to permit the army to once again target Kassam rocket cells. This decision came after a meeting Olmert held with Defense Minister Amir Peretz, Deputy Defense Minister Ephraim Sneh, and other senior security officials. Following the meeting, the Prime Minister's Office issued a statement saying that in light of the increase of rocket attacks, despite the cease-fire, "an instruction was given to the security forces to take pinpointed action against the launching cells." At the same time, the statement said, Israel would continue to observe the cease-fire and to work with the Palestinian Authority to get it to take immediate action to stop the firing of the rockets. Peretz told the cabinet on Sunday that there have been cases over the last month where the IDF spotted terrorists preparing to fire rockets, but - because of the cease-fire - did not act. The new policy would put an end to that situation. In the past two weeks, OC Southern Command Maj.-Gen. Yoav Galant has recommended taking much more extensive action inside Gaza to stop the rocket fire, but on Wednesday - according to government sources - he was resigned to accepting the new policy. According to the IDF, troops will not be allowed to operate inside the Palestinian Authority except when provided precise intelligence concerning a specific Kassam rocket cell. According to government officials, Olmert argued at Wednesday's meeting that the cease-fire had strategic value, and that Israel's policy of restraint had earned it "a lot of understanding and appreciation" around the world that would provide "leeway" in the future. Israel, according to officials in Olmert's office, can afford to continue to observe the "overall parameters" of the cease-fire, and can always take more forceful action down the line. These officials also said that even when Israel did employ more force in Gaza it was unable to stop the rocket fire, and that the 64 rockets that have fallen during the monthlong cease-fire were only one-quarter of the number of rockets fired in the month preceding the agreement. Olmert has argued in recent days that a strong military response would only unite Hamas and Fatah. Islamic Jihad spokesman Abu Hamza alluded to this when he expressed the hope that renewed fighting with Israel would help end internal Palestinian violence in the Gaza Strip. A Kassam rocket hit near Sderot after the security meeting. Islamic Jihad claimed responsibility, with Abu Hamza saying it was a response to Israel's arrest of operatives in the West Bank, which is not covered by the cease-fire. According to the new orders, the IDF is allowed to fire at Kassam cells before and after they launch rockets at Israel. The rules of engagement are dependant on intelligence, primarily on the location of the cell and whether there is a possibility that Palestinian civilians would be harmed. Terrorists often use urban areas to launch sites the rockets. "We are aware of the sensitivity of the situation," said an officer in the Southern Command. "We do not want to cause diplomatic problems." According to the officer, the IDF is also allowed to target Kassam launchers if no people are present. Based on the government decision, the IDF will continue to refrain from targeting Kassam workshops and will only fire at people if they are "ticking bombs" - terrorists on their way to, or in the midst of, an attack. Armed gunmen who approach the Gaza security fence were also, the officer said, legitimate targets. "When there is a danger, we will not stand idly by but will open fire," he said. The IDF plans to utilize the air force to target the Kassam cells and launchers. "The terrorists need to feel like they are being hunted," said one officer. "We intend to make that happen." AP contributed to the report.