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Hamas now has complete control over the smuggling routes from Egypt, having forced the clans that previously controlled these routes to take orders from it, say senior officers in the Israel Defense Forces.

The officers said there has been a sharp increase in the quantity of explosives, including various types of rockets, smuggled into the Gaza Strip from Egypt over the last few weeks.

They added that the arms smuggling has expanded markedly since Hamas seized control of the enclave this summer and ousted forces from the rival Fatah party that had previously been stationed along the Gaza-Egypt border.

The Israel Air Force carried out an air strike on the northern Gaza Strip before dawn Monday, targeting what it said was a cell of militants responsible for a mortar shell attack against Israel.

Palestinian witnesses said that seven civilians had been wounded in the strike, two of them seriously, Israel Radio reported. The witnesses added that the apparent target of the strike had been missed, and the militants escaped without harm.

The Israel Defense Forces said early Monday that the IAF had identified hitting its target following the strike, Army Radio reported.

On Sunday, a Grad-type Katyusha rocket fired from Gaza landed near Netivot, a town out of reach of the shorter-range Qassam rockets. The rocket caused no casualties, and Israel is not expected to respond militarily. But the senior officers said the increasing range of the rocket fire from Gaza increases the chances that Israel will eventually launch a major military operation in the Gaza Strip.

The Grad Katyusha has a range of about 20 kilometers - almost double that of the Qassam.

Military Intelligence chief Amos Yadlin told the cabinet on Sunday that Hamas opposes the U.S.-sponsored peace conference scheduled to take place in Annapolis next month, and will probably try to launch attacks in an effort to torpedo it.

An analysis of the rocket that landed near Netivot indicates that it was smuggled into Gaza rather than being manufactured locally. At least one shipment of Grad Katyushas is known to have been smuggled into Gaza last year, but the IDF says there could have been additional deliveries of which Israel was unaware.

Fatah sources told Haaretz on Sunday that terrorist organizations in Gaza recently received another shipment of about 70 Grad Katyushas. The IDF said it could not confirm this report.

The Popular Resistance Committees claimed responsibility for Sunday's launch. In 2006, two Katyushas were fired at Israel from Gaza, both by Islamic Jihad.

In addition to the Katyusha, at least 10 mortar shells were fired at Israel from Gaza on Sunday. Eight of the shells landed in Kibbutz Kerem Shalom, and one scored a direct hit on a house, causing major damage, though no casualties. The kibbutz has come under daily mortar fire in recent weeks.

The other two shells landed in open areas in the Negev.

While Hamas claimed credit for the mortar fire, Palestinian sources in Gaza said that the Islamic group was not involved in the Katyusha launch. But they said Hamas has made no effort to prevent such launches, and has given all the Gaza terrorist organizations a green light to fire at will on Israel.

Also Sunday, the body of Rami Ayyad, a prominent Palestinian Christian activist, was found in Gaza City. Ayyad, 30, had been kidnapped a day earlier. He was apparently shot by his captors.

The reasons for his killing are still unknown, but Ayyad, who worked for the Protestant Holy Bible Society, had been threatened by Islamic extremists in the past. About six months ago, his organization's Christian bookshop in Gaza City was bombed.

In addition to running the bookshop, Ayyad, a married father of two, was well known for offering financial assistance to distressed Gaza residents.

In the West Bank, the IDF arrested four wanted Palestinians in the Ramallah and Hebron regions yesterday. Soldiers came under fire in the Ein Beit Ilma refugee camp in Nablus, and a grenade was thrown at IDF troops in Qabatiyeh, south of Jenin. Neither incident caused any casualties.