Despite the recent escalation on the Gaza front and Monday's bombardment of Sderot, the defense establishment will not recommend a large-scale invasion into the Strip at a security cabinet meeting on Wednesday, defense officials said. The army plans to present the cabinet with a number of possible responses to the increase in Kassam rocket fire, including an incursion that could involve thousands of IDF infantry and Armored Corps soldiers. Defense officials said the likelihood of a large operation being approved was slim and that the cabinet would most likely order the IDF to slightly step up strikes against Kassam rocket squads. Other possibilities include allowing the army to operate deeper inside the Strip; until now it has restricted to within two kilometers of the security fence. With the holiday season around the corner, tension high along the Syrian border and the US-sponsored November peace summit on the horizon, defense officials said now was not the time for a large incursion. "There are many other factors that need to be taken into consideration," one official said. "The time has not yet come." On Tuesday, Defense Minister Ehud Barak declared an official state of emergency in Gaza-belt communities, thereby transferring authority over local councils and municipalities to the IDF. On Monday, nine rockets struck Sderot, including one that hit outside a day care center, sending 12 children into shock. A state of emergency grants the IDF the authority to shut down factories, schools and other institutions. The decision will be brought to the cabinet within 48 hours and at a later stage to the Knesset Foreign Affairs and Defense Committee for final approval. The committee will determine the end date for the state of emergency; defense officials said Barak was interested in extending it until after Succot, a month away. Barak also instructed Deputy Defense Minister Matan Vilna'i and Defense Ministry Director-General Pinchas Buhris to speed up the delivery of portable bomb shelters to Sderot as well as the reinforcement of buildings and bus stops in Gaza-belt communities. While Prime Minister Ehud Olmert opposes cutting electricity, water and gas supplies to Gaza to combat the rockets, Barak ordered Defense Ministry officials on Tuesday to review the legal ramifications of cutting off the supplies in an effort to impair Hamas's ability to govern the Strip. The officials were asked to review Israeli and international law on cutting off the supply of electricity, fuel and metals that could be used in the manufacturing of Kassam rockets. Vice Premier Haim Ramon raised the idea on Tuesday, calling for cutting electricity and water to Gaza for specific periods of time if the rocket fire continues. "We would decide the price tag for each Kassam," Ramon told Army Radio. "We won't continue to supply oxygen [to Gaza] in the form of electricity, fuel and water when they are trying to kill our children." According to an official in the Prime Minister's Office, this idea has been floating around for quite some time, but Olmert is opposed since he sees it as "collective punishment." According to the official, the prime minister believes this policy would be ineffective, and is afraid it would lead to a humanitarian crisis in Gaza that Israel wants to avoid. Foreign Minister Tzipi Livni seemed to be hinting at a similar tactic similar when she said at a press conference Monday that "even though we may not have an immediate solution to stop the Kassams, I do think there are other measures, beyond 'dramatic' military steps that we can take." Livni said Gaza was dependent "on Israel's willingness to continue letting it lead a certain type of life. I think we can, and should, think of using some of these means." Turning off the electricity, gas and water spigot to Gaza, if only temporarily, is something that all the ministers who will attend Wednesday's meeting believe is a good idea. Transportation Minister Shaul Mofaz has traditionally opposed touching the infrastructure in Gaza, fearing that because Israeli and Palestinian water and electricity grids are so interconnected, playing around with electricity and water supplies to Gaza could lead to Palestinian sabotage of Israeli water, gas and electricity supplies. Nevertheless, Mofaz called publicly on Olmert Tuesday to take a more aggressive action against the Kassam attacks, advocating targeting the leaders of terrorist organizations. At the dedication of a new train station in Mod'in, Mofaz said, "A sovereign nation cannot allow terrorist leaders to determine the fate of Sderot's children." "In previous years, when we stood before the threats of terrorists and suicide bombers we worked against the heads of terrorist organizations, Hamas and Islamic Jihad, and we stopped the wave of suicide bombers," he said. "Mr. Prime Minister, I call on you today to direct the IDF and Shin Bet [Israel Security Agency] to strike the leaders of the murderers, and to return security to Sderot and the citizens of Israel." Officials in the Prime Minister's Office said that Israel had not abandoned targeted killings of the heads of terrorist organizations, and was simply waiting for the proper time - based on intelligence information and a desire not to harm noncombatants - to carry these operations out. The officials said Israel was likely to "increase the pressure" on the leaders of Islamic Jihad, which is carrying out the bulk of the Kassam rocket attacks, in the coming days, but was unlikely to launch any major military offensive in Gaza. In addition to Olmert, Barak, Livni, Mofaz and Ramon, Wednesday's security cabinet meeting will be attended by Public Security Minister Avi Dichter. Government sources said that the ongoing talks between Olmert and Palestinian Authority Chairman Mahmoud Abbas were not limiting Israel's room for maneuverability, and that Abbas "would love" to see the Kassam rocket fire stopped. Abbas condemned the attacks on Tuesday, saying they threatened the diplomatic process. "We condemn the launching of rockets from Gaza because these actions harm peace and the peace process," Abbas said at a news conference with visiting Austrian Chancellor Alfred Austrian Chancellor in Ramallah.