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A Qassam rocket fired by Palestinian militants in the Gaza Strip struck a residential yard in the southern town of Sderot on Sunday, leaving one person with light shrapnel wounds. Several other people were treated for shock.

This was the third rocket to hit the Negev on Sunday, as violence between Israel and the coastal territory continued for a second week. Some 17 rockets and mortar shells hit southern Israel over the weekend, including four advanced Grad-type missiles.

Outgoing Prime Minister Ehud Olmert on Sunday warned Gaza militants against further breaches of a five-month truce, speaking shortly after the Israel Air Force killed four gunmen who were firing mortars into Israel from the coastal territory.

"We will not tolerate the price tag that terrorist organizations are attempting to set. We will strike anyone who tries to violate the truce," Olmert told ministers at Sunday's cabinet meeting.

The prime minister said he had told the Israel Defense Forces to present plans for various operations against Hamas' regime in Gaza, but gave no timeframe.

"We are not eager for battle but we do not fear it," Olmert said.

During the session, Deputy Prime Minister Eli Yishai decried government inaction in the face of cross-border violence.

"Whoever believes in the truce is burying their head in the sand," he said. "Instead of [us] destroying Hamas' headquarters from the air, the truce is only being used by Hamas to rearm. To my great regret, the government is not reaching decisions."

Yishai added that he could not understand why Israel was continuing to supply Gaza with electricity and water amid the ongoing rocket fire.

He made the comments a few hours after Gaza militants fired two rockets into Israel.

Transportation Minister Shaul Mofaz also called for a change of policy regarding Gaza's Hamas rulers.

"Hamas is growing stronger and we are losing our deterrence," said Mofaz, a former defense minister and IDF chief.

Earlier Sunday, Yisrael Beiteinu chairman Avigdor Lieberman urged Olmert to fire Defense Minister Ehud Barak for abstaining from more aggressive action against Gaza militants due to what he branded political considerations.

"Barak is engaging in a political struggle at the expense of Israeli citizens' security," Lieberman told Israel Radio.

The right-wing politician argued that Israel needs to regain control over the Philadelphi Route along the Gaza-Sinai border to stem the smuggling of arms by Hamas into the coastal territory.

He added: "Every second Barak continues in his position, this is the surrendering of Israel's security. This is also a surrender of our deterrence. Time after time he says: We are nearing a broad operation [in Gaza], but nothing happens."

PRC says militants killed in strike were launching rockets at Israel

The militants killed in the airstrike were from a small Hamas-allied group known as the Popular Resistance Committees. A spokesman for the group calling himself Abu Attaya said the four were firing mortars into Israel when they were killed.

The IDF said the airstrike targeted a rocket squad in northern Gaza.

Hamas spokesman Fawzi Barhoum threatened retaliation. "Today's crime will not pass without punishment," he said.

Earlier in the day, Palestinians launched two rockets into Israel, hitting near a community on the Israel-Gaza border. No one was hurt, the military said.

According to the military's count, Palestinians have sent more than 170 rockets and mortars flying into Israel since the violence resumed nearly two weeks ago. IDF troops have killed 15 militants, and two more died in unclear circumstances. No civilians have been killed on either side.

Meanwhile, Israel is keeping its crossings into Gaza shut because of the ongoing rocket fire, barring badly needed goods and fuel from entering the impoverished territory. United Nations food supplies in Gaza have been depleted and the fuel cutoff has led to power shortages.

IDF spokesman Peter Lerner said officials would decide later Sunday whether to reopen them. International pressure to crack open the passages has been mounting.

J'lem sources: Coming days crucial in knowing if truce can be salvaged

Government sources have said the next few days will be crucial in determining whether the ceasefire with Hamas may be salvaged.

At the same time, Defense Minister Ehud Barak warned against any rash action that may destabilize the situation.

"Blowing things out of proportion is not a state policy," Barak said. "This situation is intolerable. The defense establishment must act decisively against Hamas and other extremists in the Gaza Strip," Barak noted during a speech in Netanya.

Four of the 17 rockets fired at Israel over the weekend were Grads, which have a greater range and payload than Qassams.

Hamas claimed responsibility for the attack and said it was acting in response to attacks by Israel Defense Forces against Palestinian militants and following the death of a Popular Resistance Committee gunman in an explosion in northern Gaza early Friday.