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Hamas on Sunday threatened to respond to an ongoing Israel Defense Forces assault on the Gaza Strip by assassinating senior Israeli officials. Senior Hamas official Fatah Hamad specifically threatened Livni and Defense Minister Ehud Barak.

He also threatened that Hamas would go after senior Palestinian Authority officials in the West Bank, as well as "those in the Arab world who have conspired against us," - an apparent reference to Egypt.

PA President Mahmoud Abbas, however, said that Hamas could have prevented Israel's assault had it only agreed to extend the cease-fire, and he urged it to do so now.

Late Sunday Israel Air Force warplanes attacked a building in the Jebaliya refugee camp next to Gaza City, killing a 14-month-old baby, Gaza Health Ministry official said.

Earlier Sunday, the IDF massed troops near the Gaza border in preparation for a possible ground operation against Hamas. In parallel, the cabinet approved a relatively small call-up of the reserves - some 6,700 soldiers - in case they are needed for the operation.

Defense sources said, however, that additional reservists may be called up as the fighting continues.

By comparison, only a few thousand reservists were called up in the first days of the Second Lebanon War in 2006. By the end of the war, however, some 62,000 reservists had been called up.

The air force struck more than 100 targets Sunday, the second day of Israel's aerial bombardment of Gaza. According to Palestinian sources, the bombings killed 43 people, bringing the death toll for the two-day operation to over 290.

Among the targets were 40 smuggling tunnels under the Gaza-Egypt border, which Israel bombed in an effort to shut down Hamas' main conduit for arms. That operation took exactly four minutes.

Most of the targets, however, were in Gaza City, including Hamas Prime Minister Ismail Haniyeh's office and the offices of various Palestinian security services. The air force also hit several targets in northern Gaza, the main launching pad for Palestinian rocket strikes on Israel.

Palestinians fired about 30 rockets at Israel on Sunday, bringing the number of rockets and mortars fired at the country over the last two days to about 150. That is far fewer than the army had predicted, though defense sources expect the number to increase in the coming days.

For the first time, however, Sunday's launches included two enhanced Katyusha rockets with a 40-kilometer range. Both landed near Ashdod.

Due to the fighting, southern Israel resembled a ghost town on Sunday. The only vehicles on the roads belonged to journalists, the police and, mainly, the army.

Foreign Minister Tzipi Livni told the foreign media that Israel does not seek to reoccupy Gaza, and government sources said the Foreign Ministry is already working on an exit strategy - though this strategy would not involve stationing an international force in Gaza.

Israel also promised representatives of international aid organizations that it would continue allowing humanitarian aid into Gaza even as the fighting continued. On Sunday, for instance, the Kerem Shalom crossing was opened to let through 26 trucks carrying food and medical equipment.

By the end of Monday, the third day of Operation Cast Lead, Israel will be close to exhausting its target bank for aerial bombing. At that point, it will have to either launch a ground operation or bring the campaign to a speedy conclusion. Thus far, however, Israel has been sending conflicting messages about where the operation is headed.

On the one hand, despite its stated goal of a limited operation ending in a new and improved cease-fire, Israel has so far not sent Washington its outline of an acceptable formulation and asked it to begin mustering the requisite international support. And since that process is likely to take several days, if the goal were to end the fighting quickly, Israel's diplomatic initiative should have been ready to go at the same time as its military initiative.

This is especially the case because, unlike in the Lebanon war, it does not have the excuse of having been caught by surprise.

On the other hand, the military mobilization so far is not nearly enough for a major ground operation - and even if the requisite several divisions were called up, they would need a few days of training before they were ready to enter Gaza.

At the moment, therefore, neither a full-scale invasion of Gaza nor a quick diplomatic solution seems in sight.