Prime Minister Ehud Olmert intimated to visiting German Foreign Minister Frank-Walter Steinmeier on Monday that Israel would take widespread military action in the Gaza Strip if a Kassam rocket kills Israelis. A few hours later, the IAF bombed a car carrying Kassams in Gaza. Olmert, according to diplomatic officials, spoke at length with Steinmeier about how detrimental the Kassams were to moving forward with a diplomatic process, and that it was a miracle no one was killed when a rocket hit near a Sderot preschool on Monday. Steinmeier, according to diplomatic officials, came to his visit with Olmert flush from recent meetings in Sharm e-Sheikh with Arab foreign ministers and Palestinian Authority Chairman Mahmoud Abbas with a feeling that Abbas wanted to move diplomacy forward. But Olmert reportedly said the Palestinians could not sit idly by as rockets fall and expect a diplomatic process. "The Kassam attacks constitute a tangible threat to Israel," he said. "Israel cannot show restraint forever." A government official said there was a growing consensus in Jerusalem that a major offensive was needed to combat the Kassams, but that such an operation was made more complex by the realization that the operation would not be able to totally silence the rockets. Nevertheless, the IDF position is that the number of attacks could be significantly decreased. After the strike on the car carrying the Kassams, defense officials said the IDF would continue to target Palestinians involved in rocket attacks. One person was wounded in the IAF missile strike near Beit Hanun, according to Palestinian sources. It caused secondary explosions due to the large number of rockets being transported in the car. The IDF said the vehicle was on its way to deliver the rockets to terrorist cells at launch sites in northern Gaza. Islamic Jihad said its members in the car were on a "holy mission." It said two of the group's operatives escaped the vehicle seconds before the attack, and one passerby was wounded. Medical officials said the man was in moderate condition. On Sunday, one person was moderately wounded in a rocket attack near Sderot, and on Monday morning a rocket hit a home next to the preschool. Defense Minister Amir Peretz said the IDF would respond to the Kassam attacks. "We are doing everything possible to maintain calm, but our commitment is to protect the citizens of the State of Israel," he said. "Therefore, we will choose the right time to take the necessary steps against those who intend to attack us." Setting Israel's policy in Gaza was the topic of a brief conversation between Olmert and Foreign Minister Tzipi Livni picked up by microphones at a Kadima faction meeting Monday afternoon. Livni demanded to be briefed on what was going on. Livni complained to Olmert that she heard about IDF plans for Gaza from a conversation with Transportation Minister Shaul Mofaz, rather than in a formal discussion in the security cabinet. Olmert assured Livni she would be briefed on Gaza at a security cabinet meeting on Sunday. Livni said she was annoyed the IDF was saying that the diplomatic level was holding it back. Olmert said the IDF wanted to do something on Tuesday, but that he instructed them to "relax." Prior to the Kadima faction meeting, Livni - at a press conference with Steinmeier after they met - expressed frustration that just a week after the publication of the interim Winograd Report, which called for the Foreign Ministry to be more involved in the decision-making process on security and diplomatic matters, she was hearing about IDF plans for Gaza in the media. "There is a need to change the way the government works, and the relations between the diplomatic and military level," she said. "As a security cabinet member, I expect that there be a discussion, and that the military bring its plans to the security cabinet, so I hear it from them and not through the press." Livni said the situation in Gaza was complicated, with the Egypt-Gaza border "open," arms flowing into the area and Gaza turning into a "terrorist nest." She said it was the government's obligation to have a wise and structured decision-making process to decide how to deal with that situation. Yaakov Katz contributed to this report.