Israel will escalate its ground and air operations in the Gaza Strip this week and may begin targeting members of the Hamas political leadership in the wake of intensified Kassam rocket attacks against Sderot, senior defense officials said Sunday. The officials said it was premature to launch a major ground operation and that the army still had a number of steps to try before reaching that point. "The IDF has not exhausted all of its options," a defense official said. The decision to escalate military operations was made after two brothers, aged eight and 19, were seriously wounded by a Kassam rocket in Sderot on Saturday night. Interior Minister Meir Sheetrit told The Jerusalem Post that during Sunday's cabinet meeting, he had called on the IDF to "take off its gloves," head into Gaza with armored tractors and raze an entire neighborhood from which rockets have been launched, and then withdraw. The residents of that neighborhood would be warned in advance to flee, he said. Under international law, people have the right to defend themselves, he said. "This kind of action would be very well understood by the Palestinians," Sheetrit said. "It is inconceivable to leave the situation as it is." Past restraint had been interpreted by the Palestinians as weakness, and as a result the number of attacks had increased, he said. Prime Minister Ehud Olmert spoke with reporters on Sunday about the Palestinian rockets while en route to Berlin for a two-day visit, his office said. Israel was doing everything that it could to halt the attack, he said, but "there is no way to stop terrorism in one fell swoop or with one bomb." Earlier at the cabinet meeting, as angry Sderot residents protested outside, Olmert dismissed calls for a broad Gaza incursion by saying: "There is no doubt that the pain [of Sderot] is felt by all; the outrage is natural, but outrage is not an action plan. We must act in a systematic and orderly fashion, over time. This is what we are doing. This is what we will continue to do." He noted that Defense Minister Ehud Barak had visited Sderot that morning and that in recent months, 200 terrorists had been killed and hundreds of others had been wounded in Gaza. "Naturally, we cannot be oblivious to the sense of distress in Sderot and the communities adjacent to the Gaza Strip," Olmert said. Following security consultations held Sunday between Olmert, Barak and senior security officials, the IDF was given the green light to slightly escalate operations against a previously-approved bank of targets that includes Hamas "military" installations and buildings affiliated with the Hamas government in Gaza. The army will also continue its raids into the Strip. "We will continue with the targeted killings and the pinpointed raids into Gaza," the official said. "We need to keep up the pressure on the terrorist groups and not stop even for one moment." As The Jerusalem Post reported exclusively on Friday, the defense establishment is also studying the possible consequences of killing senior Hamas political leaders - such as Ismail Haniyeh and Mahmoud Zahar - and the effect such a move would have on the attacks from Gaza. Before this happens, we need to review the consequences and whether it will be effective," an official said. Senior IDF officers said that while the military was prepared for a large operation in Gaza, Chief of General Staff Lt.-Gen. Gabi Ashkenazi did not believe that the time was ripe since Israel had yet to formulate an "exit strategy" for such an incursion. "We know how we get in but we do not know how we get out," a senior officer said, adding that an operation would be pointless in the absence of a multinational force that would deploy in Gaza or Palestinian Authority President Mahmoud Abbas taking control from the IDF. "Neither of these options are very realistic today," the officer said. Sheetrit told the Post he too was concerned about the IDF's ability to exist in Gaza and that therefore Israel had to be careful not to reoccupy Gaza. At the same time, he said, it should not agree to a cease-fire with Hamas. Vice Premier Haim Ramon said Israel should focus on measures such as cutting electricity immediately after rocket attacks. Public Security Minister Avi Dichter said past IDF actions had only seemed to draw more rocket fire. In the first five weeks of 2008, Gazans had fired 330 rockets at Negev communities, one-third of what they fired at Israel in all of 2007, he said. Last weekend alone 40 rockets were launched, of which 14 struck Sderot, Dichter said. He, too, hinted at the need for large-scale ground activity. Foreign Minister Tzipi Livni told reporters after the cabinet meeting, "There is no hope for the Palestinian people with Hamas. There is no hope for any kind of peace or the vision of a Palestinian state which includes the Gaza Strip without a real change on the ground." She added that the rocket attacks were not part of a "vicious cycle" as described in the international media, but rather an action that could be stopped by Hamas. "The world cannot dismiss this by simply saying that there are casualties on both sides. That is not a just comparison," she said. She called on the international community to support Israeli retaliatory actions and to take steps themselves against Hamas. Speaking on the plane to Berlin, Olmert said Hamas was not a partner for peace as long as it refused to return Cpl. Gilad Schalit, who it kidnapped in June 2006. It must also accept the principles laid out by the Middle East Quartet, including renouncing violence and recognizing Israel's right to exist, said Olmert. Also on Sunday, IDF soldiers shot and killed a Palestinian gunman who opened fire at them near the security fence in the northern Gaza Strip. Overnight Saturday, the air force bombed a number of Hamas targets throughout Gaza, including a weapons-manufacturing plant in Rafah and a weapons storehouse in Gaza City.