The security cabinet on Sunday night approved a series of military steps in the Gaza Strip, but put them on hold pending developments regarding the fate of Cpl. Gilad Shalit, who was captured Sunday morning near Kerem Shalom. Earlier Sunday, Prime Minister Ehud Olmert placed the blame for the attack squarely on the shoulders of Hamas and the Palestinian Authority, perhaps laying the groundwork for a major military operation.

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"We in Israel hold the Palestinian Authority, headed by President [Mahmoud] Abbas and the Palestinian government, responsible for this incident, with all that implies," he said. Following an emergency meeting of the security cabinet in Tel Aviv, the Prime Minister's Office put out a statement late Sunday night saying that Israel "will take all the necessary actions to bring about the release of the captured soldier." It said that this was the main priority, and that the security cabinet approved preparations presented by the defense establishment to achieve this. These steps were not spelled out, with the statement saying only that the cabinet approved the security establishment's recommendation to prepare the necessary forces to carry out "an emergency military action" that would be dependent on the "actions and intentions of the Palestinian Authority." One official in the Prime Minister's Office said the PA would be given 24 hours to release Shalit, before military steps were approved. He said that the government did not want to prematurely authorize military action that might endanger his life. According to the statement, the PA "will bear responsibility" for any harm done to Shalit. And, in a hint that the IDF may target Hamas chiefs, the statement continued, "No individual and no organization will have immunity during this period." In addition to preparations for military action, the statement said diplomatic efforts would continue with the international community to pressure the PA to free Shalit. Foreign Minister Tzipi Livni phoned her counterparts around the world to help secure Shalit's release. According to sources in her 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." 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, 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 (Israel Security Agency), whose name cannot be published, told the ministers that Hamas was a full participant in the attack. The deputy characterized the attack as the "largest, most successful and most serious" since last summer's disengagement. Livni was not the only one 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." Magen David Adom director-general Eli Bin also contacted Dr. Yunis el-Khatib, head of the Palestinian Red Crescent, and asked him to ensure Shalit's safety and health. Now that both MDA and the PRC have become full-fledged members of the International Red Cross and Red Crescent Movement, said Bin, Khatib was obliged to take such action. At the cabinet meeting, Peretz briefed the ministers on the attack, even as Olmert was being made aware of 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 and anti-tank missiles. Peretz said that the IDF's operations in recent weeks, from the killing of Jamal Abu Samhadana earlier this month to the arrests of two Hamas operatives in Gaza on Friday, were linked to attempts to foil the planned attack. Warnings of an attack were also the reason why Israel had closed down the Kerem Shalom crossing 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 being directly responsible for attacks. He said that in recent weeks it has taken part in a number of attacks, including planting bombs near the fence around Gaza. He said a Hamas cell planning to kidnap IDF soldiers "in the Sinai region" had recently been arrested. He noted that the Hamas leadership abroad was pulling the organization in the direction of refusing to 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." He said that in recent weeks Hamas ministers have smuggled some $30 million into Gaza, which has slightly relieved the economic hardship there and enabled the PA to pay $400-$500 to its 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 were there only to supervise the crossing, not to take police-type action like the confiscation of suitcases filled with money. The deputy added that despite press reports to the contrary, there was still a large gap between Hamas and Abbas regarding the prisoners' document that they were trying to bridge. 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 it was opposed to the condition in the agreement that "resistance" be limited to the territories. He said that Israel should not get "overly excited" about the document and that terrorist activity would continue even if an agreement were signed. He stressed that Islamic Jihad was not a party to the agreement. He also said that 10 Kassam rockets were fired at Sderot by Islamic Jihad in the last 24 hours. Judy Siegel contributed to this report.

PM: Hamas to blame for attack

Cabinet: Military action dependent on the actions and intentions of the PA.