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"Israel views missile fire and attempts to carry out terrorist attacks from the Gaza Strip as a fundamental, gross violation of the understandings that led to the truce," Prime Minister Ehud Olmert said after consulting on Friday with Defense Minister Ehud Barak, IDF Chief of Staff Gabi Ashkenazi, Shin Bet chief Yuval Diskin, and other senior officials in the defense establishment.

"Israel has no intention of reconciling with these events," Olmert said, adding that the government will not permit a segment of Israel's civilian population, particularly those living on the outskirts of the Gaza border, to return to a state of uncertainty that preceded the cease-fire.

Under the terms of the cease-fire, which went into effect in mid-June, Israel agreed to allow goods into the Gaza Strip through border crossings it controls, while Gaza militants were to refrain from firing rockets. A policy of closing border crossings in response to rocket fire has been employed by Israel.

Gaza militnats fired at least sixteen Qassam and Grad rockets into the western Negev since the early morning hours on Friday. One Israeli was lightly wounded in the attacks.

Vice Premier Haim Ramon said Friday that the latest flare-up of violence along the frontier with the Gaza Strip spells the death knell of the six-month truce.

"These last two days are the de facto conclusion of the lull, even if there are those who refuse to recognize this," Ramon said. "When the truce in Gaza was first decided upon, I cautioned that it was a tactical and strategic error by the State of Israel to recognize the state of Hamastan," he added, referring to the Hamas-controlled Gaza Strip.

During a visit to the beleaguered western Negev town of Sderot, the defense minister vowed that the government would move decisively to protect residents living within range of Palestinian projectiles.

"We will keep protecting our soldiers and people and keep acting against attempts to interrupt the cease-fire, but if the other side will want or wish to keep the cease-fire alive, we'll consider it seriously," Barak said.

The strikes began in the early hours of Friday when eight Qassams exploded in and around the southern city of Sderot. Another five rockets, claimed by Hamas to be of the Grad type, struck Ashkelon a few hours later.

One Israeli sustained shrapnel wounds and four others were treated for shock after the first eight rockets exploded in Sderot and in a kibbutz nearby. Two of the rockets that hit Sderot damaged local buildings.

Immediately after the initial barrage, an Israel Air Force aircraft fired a missile at a rocket-launching area in the northern Gaza Strip, wounding two gunmen.

The two gunmen named as members of the Islamic Jihad militant group. Hamas claimed responsibility for all of the rockets fired on Friday.

Meanwhile on Friday, UN Secretary General Ban Ki-moon said the flare-up in fighting that violated the ceasefire in Gaza Strip has the potential to inflict more suffering and violence to the civilian population.

"Measures that increase the hardship and suffering of the civilian population of the Gaza Strip as a whole are unacceptable and should cease immediately," Ban said.

He urged Israel to allow the UN Relief Works Agency for Palestinian refugees and all humanitarian agencies to resume relief activities in Gaza.

On Thursday, Israel delivered a message to Hamas via Egyptian intermediaries indicating that while it has no interest in escalating tensions along the Gaza border, it would retaliate against any attempt by the Islamist group to carry out attacks.