Prime Minister Benjamin Netanyahu called Thursday's terrorist attacks in the south a strike at Israeli sovereignty, and pledged Israel would respond appropriately. "If the terrorist organizations think they can harm our citizens without a response, they will discover that Israel will exact a heavy price from them," he vowed. At least part of the response came Thursday in the form of an Israeli aerial strike in the Gaza Strip.

The defense establishment had received prior information about the possibility that Palestinian terrorist groups would infiltrate into Israel from Sinai to carry out an attack. A senior Israeli official in Jerusalem said the intelligence warning had already been in place for some time and as a result the anti-terror unit in Eilat had been put on alert, as had the anti-terror unit of the Israel Police. The official noted, however, that there had been disagreement within the defense establishment about the severity of the warning and its focus.

During the day Thursday at a situation assessment with senior IDF officers and other members of the defense establishment, Defense Minister Ehud Barak said: "The event reflects the weak hold of Egyptian authorities in Sinai and the expanded activity of terrorist elements. The source of the terrorist acts is in Gaza, and we will act against them with full force and determination."

The forum of eight senior cabinet ministers convened Thursday evening to consider the continued Israeli response to the terrorist attacks and possible additional escalation by terrorist groups in the Gaza Strip.

Nonetheless, it is expected that even if Israel carries out further strikes in Gaza, Israeli officials will try as much as possible to head off an escalation that would result in wide-scale hostilities in the south, including massive rocket fire on towns in the Negev.

Over the course of the day Thursday, Netanyahu received ongoing briefings on events in the south and was in regular telephone contact with Barak. The prime minister approved the aerial strike on Gaza which killed leaders of the Popular Resistance Committees, to which yesterday's terrorist attacks in the south have been attributed.

"We have been witness today to an attempt at escalation on the terror front through attacks from Sinai," Netanyahu told the media, adding: "If anyone thinks the State of Israel will be reconciled to this, he is mistaken. I established a principle, that when Israeli citizens are harmed, we respond immediately and forcefully. This principle will be implemented today, too. The people who gave the order to murder our citizens and who hid in Gaza are no longer alive."

The Israeli Foreign Ministry advised Israeli embassies abroad to convey a harsh message to foreign ministries around the world over the gravity with which Israel views yesterday's attacks and directed Israeli diplomats to urge foreign governments to issue statements of condemnation, which indeed were forthcoming, with the first of them coming from German Foreign Minister Guido Westerwelle.

American Secretary of State Hillary Clinton also condemned the attacks, saying: "These brutal and cowardly attacks appear to be premeditated acts of terrorism against innocent civilians. Our deepest condolences go out to the victims, their families and loved ones. This violence only underscores our strong concerns about the security situation in the Sinai Peninsula. Recent commitments by the Egyptian Government to address the security situation in the Sinai are important and we urge the Egyptian Government to find a lasting resolution." The French Foreign Ministry also issued a statement of condemnation, saying that France stands with the people of Israel at this difficult time.

The Magen David Adom emergency service called on the public to donate blood, which is traditionally in short supply at the end of the summer.

Eilat Mayor Meir Yitzhak Halevi accompanied Defense Minister Barak on a visit to Yoseftal Hospital to visit the only injured patient not yet released from the Eilat hospital. The mayor said he was receiving regular security briefings regarding steps being taken to maintain the city's regular routine. The Eilat Jazz Festival is opening in town on Sunday, as scheduled.