Israel's Cabinet has decided to intensify air strikes on Palestinian militants in Gaza, in response to rocket attacks. Prime Minister Ehud Olmert said Israel would strike at the terrorist infrastructure and those responsible for firing rockets across the border.
Mr. Olmert said the military leaders of Hamas and the Islamic Jihad would be targeted.
The decision came after six days of air strikes on Gaza, in which Israel has targeted militants in their vehicles and suspected rocket factories. However, ministers ruled out a ground offensive in Gaza, saying they wanted to avoid a major escalation.
The government has been under growing pressure from angry residents of the Israeli border town of Sderot, which has been hit by dozens of rockets since Wednesday.
"This government has done nothing!" shouted one resident. "This country should be ashamed! They are caving in to terror!"
The Cabinet's decision came as Hamas and the rival Palestinian Fatah faction agreed to end all hostilities, strengthening a ceasefire reached on Saturday. Gun battles on the streets of Gaza have left some 50 Palestinians dead over the past 10 days.
Palestinian Information Minister Moustafa Barghouti said the agreement is bittersweet.
"I never felt so shameful in my life like when we had to use the word 'cease-fire' between Palestinians."
With Israel stepping up air strikes on Gaza, the Palestinians have put aside their differences, for now.