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Government sources believe most Security Cabinet members will support increasing financial pressure on the Gaza Strip during the cabinet's meeting in Jerusalem on Wednesday, in response to the ongoing rocket fire at Israel.

Sderot parents, meanwhile, intend to demonstrate outside the Knesset building. Sources in the defense ministry said that Defense Minister Ehud Barak ordered the Israel Defense Forces on Tuesday to examine the implications of temporarily cutting off the Strip from Israeli infrastructure, including electricity, fuel and the supply of basic commodities.

Barak ordered the defense establishment to examine "the operational and legal aspects of steps designed to limit Hamas' rule in the Gaza Strip." Barak told the IDF he wanted to determine the degree to which Israel was obligated to provide services for the Strip.

The call to cut off water, electricity, gas and fuel to the Strip is seen as an alternative - or, if unsuccessful, a prelude - to a broad IDF incursion into northern Gaza. Government sources, however, said Prime Minister Ehud Olmert was unlikely to authorize an escalation in Israel's military actions in the region.

Sources close to Public Security Minister Avi Dichter said that the minister had told Olmert of his plan to broaden the IDF's military activity in the Strip during a private meeting the two held on Sunday. According to the sources, Dichter's plan does not involve retaking the Strip, but employs a combination of air raids and concentrated ground offensives in various sectors of the Strip.

"Each attack will focus on a different part, but in no point will the IDF forces be required to hold territory inside the Strip," sources said of Dichter's plan. Dichter has reportedly sent copies of his proposal to Barak and to several IDF generals.

Dichter reportedly told Olmert that the cabinet needed to change its reliance on countering rocket fire by tactical attacks, and switch to a broader view concerned only with putting a total end to the firing of Qassam rockets at Israel.

However, government sources told Haaretz that given the current circumstance, Olmert is likely to conclude that the scale of the IDF's military activity in the Strip is at a maximum right now. "Going in any deeper would require very large forces indeed, which would have to stay in the area for a long time," the sources said.

Earlier Tuesday, Vice Premier Haim Ramon - one of a growing number of cabinet ministers in favor of cutting off utilities to Gaza - said that Israel should attach a "price tag" to every rocket launched at Israel.

"We will set a price tag for every Qassam, in terms of cutting off infrastructures," Ramon told Army Radio. "Hamas will ... know this in advance. We will not continue to supply 'oxygen' in the form of electricity, fuel, and water while they are trying to murder our children."

As senior politicians debated what action to take, one Qassam rocket struck an open area in the western Negev Tuesday, causing no damage or injuries, and the Knesset convened for a special discussion on negotiations with the Palestinian Authority. Likud leader Benjamin Netanyahu accused Olmert and Barak of "creating the problems with which Israel is now forced to contend through a succession of reckless decisions and moves."

On Monday, Islamic Jihad claimed responsibility for launching seven rockets at the western Negev, one of which struck near a day-care center in Sderot. There were no injuries, but 12 children were treated for shock.

Following the attack, the Sderot Parents Committee decided to keep children home from all of the city's schools until further notice. The committee announced it intended to appeal Wednesday to the High Court of Justice to receive permission for parents to enroll their children in schools outside the city, until the completion of reinforcements for all municipal schools.

People from Sderot are scheduled to arrive Wednesday at the Wohl Rose Park in Jerusalem to protest what they call the government's ineptitude at providing security for the northern Negev. The event's organizers intend to bus in the school students to participate in the demonstration.

According to Barak's office, the defense minister also decided to extend an order issued by his predecessor Amir Peretz, declaring a "special situation" along the border with Gaza. Barak decided the time is not yet ripe to revoke the order, which will be in effect for the coming 48 hours, and gives the Israel Defense Forces wide authority to run civilian affairs based on security concerns.

After 48 hours, a further extension of the order will be brought before the government for approval, and then to the Knesset Foreign Affairs and Defense Committee as well as the Knesset plenum for approval.

In addition to granting the IDF the power to issue instructions to the education and health system as well as other essential services, the order also allows for special compensation to be paid to victims of Qassam fire.

The order entitles the security establishment to issue any order necessary for protecting lives and property.

In addition, Barak also instructed his deputy Matan Vilnai and Defense Minister Director General Pinchas Buchris to accelerate production of reinforcement methods in order to better protect buildings near the Gaza Strip from rocket fire.