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As Israel's leaders struggled to summon a response to deter further Palestinian rocket attacks, the public found itself staring down a potential double-barrelled nightmare - the threats of Scud missiles launched from Iraq and Kassam rockets from the West Bank and Gaza Strip.

The fear of Iraqi attacks has grown by the day, as Israeli officials have come to believe that Saddam Hussein's regime may be the next target of the U.S.-led war on terrorism. Israelis are particularly sensitive to the likelihood that Iraq's president will respond to an American onslaught by unleashing Scuds on their population centers - as he did when President George W. Bush's father spearheaded an anti-Iraqi coalition during the 1991 Gulf War.

This week, Israelis found themselves wondering whether Palestinian militants might beat the Iraqis to the punch, after at least two Kassam-2 rockets fired from Gaza slammed into open fields in southern Israel on Sunday. The firings represented a direct challenge to Prime Minister Ariel Sharon, who had warned repeatedly that any such fire would be met with the direst of consequences. "What is most interesting here is that the Palestinian side, despite everything, decided to throw down the gauntlet," notes Ha'aretz defense commentator Ze'ev Schiff.

Moreover, the Kassam-2's range of more than six kilometers means it can strike at the heart of Israeli population centers, especially if fired from the West Bank. Worse still, unlike the ballistic Scuds, which travel hundreds of kilometers and take precious minutes to reach their target, there can be no early warning of a Kassam attack.

"There's no question that the Palestinians see this as a strategic weapon," said Major-General (res.) Shmuel Arad, a former head of the Home Front Command. "They are trying to achieve a sort of balance such as that which was created in Lebanon, with thousands of missiles and Katyusha rockets of various kinds - which they would deploy along the Green Line and the border of the Gaza Strip."

The Kassam-2 does not represent a quantum leap in range or firepower from mortars and rockets already in Palestinian arsenals, but that comes as cold comfort to the Israeli public, says Ha'aretz commentator Reuven Pedatzur. "The only real difference is the psychological element. When a thing like this lands in the middle of a populated city within the Green Line, then the psychological impact becomes most important."

For Israelis, whose personal security has already been shaken to the core by shootings and explosions in the heart of cities, the Kassam-2 might strip away their remaining shreds of confidence. "With the passage of time, we can expect more and more Kassam-2's," Pedatzur remarks. "This is unavoidable, a completely normal process in which the other side will manufacture more and more as long as the violent struggle continues in the territories."

Moreover, the dangers of rocket attacks extend well beyond city areas. "For example, Israel cannot afford closing down Lod Airport," says Schiff, in a reference to Tel Aviv's Ben-Gurion International Airport, which is located just minutes from the 1967 border of the West Bank. "It would not take more than a few shells, before airlines began refusing to fly here."

Palestinians have argued that Israel's use of F-16 fighters, Apache helicopter gunships and tanks in battling militants in the territories dwarfs anything in their stockpile of weapons. They have often celebrated suicide bombings and other deadly strikes at Israel as helping to even a macabre score in nearly a year and a half of unremitting violence.

Hawks criticized the government for not reacting immediately to the Sunday rocket salvo, saying Prime Minister Ariel Sharon should have ordered a ground offensive to seize broad areas under PA control in order to hunt down rocket launchers and distance militants from Israeli cities. "Apparently, we won't go in until we are hurt much more than we've already been hurt," said hardline Public Security Minister Uzi Landau.

Regardless of the scale of Israel's response, the ease by which the small rockets can be moved and fired - even by remote control or time fuses - could stymie the IDF's best efforts to eradicate them.

"In order to distance rockets like the Kassam, you must have a security space, and in order to do this, you must capture territory in a massive entry into [PA-controlled] Area A," Schiff says. "But even this does not solve the problem, because this is not empty territory. We saw this in Lebanon, where they were able to fire Katyusha rockets from within villages, in courtyards, from behind houses."

In Schiff's view, the firing of the Kassams coincides with a wider Palestinian desire for escalation. "The Palestinian assessment is that only escalation will bring the Americans back into involvement in the area... All in all, we are deteriorating toward a larger conflict, with the [Palestinian] aim being that that the international community will intervene to a greater level.

"In the end, the military conflict will have to reach a stage of diplomatic arrangements and agreements," Schiff concludes. "But until that stage, until they seriously sit down at the negotiating table, it's very possible that the two peoples are heading for a horrible shedding of blood."