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Prime Minister Ehud Olmert, pressed by Sderot residents to declare a state of emergency in the hard-hit Negev town, pledged Sunday that his government would build bomb-shelter rooms in 200 Sderot homes each month, at a cost of hundreds of millions of shekels, and would grant frontline status to the towns and villages bordering Gaza.

Frontline status enables residents to receive special protection packages, and certain tax breaks and other benefits.

Meanwhile, Qassam rockets continued to fall Sunday. Three Qassams landed near Sderot while anoter hit central Sderot. No injuries were reported in either attack, though several buildings sustained damage. Three additional rockets landed in open fields in the western Negev.

Earlier, five rockets struck the region Sunday morning. One hit a house, which was vacant at the time. A total of 12 rocket landed in the area Sunday.

Some 45 rockets were fired at the western Negev over the weekend, 15 of them landed in Sderot, wounding four people lightly. One rocket hit a parked car, another damaged a factory and a third caused a fire near Sapir College. One woman was treated for shock.

Olmert, as well as Defense Minister Amir Peretz, who lives in Sderot and was once the town's mayor, have been under mounting pressure to allocate resources to reinforce homes, schools, factory, and other structures in and around Sderot.

The pressure has grown in recent days, after Russian-Israeli tycoon Arkadi Gaydamak announced that he planned to spend tens of millions of shekels in reinforcing buildings in Sderot and offering residents temporary alternate in other areas of Israel.

Peretz lashed out at Gaydamak at a cabinet meeting Sunday, saying he was unwilling to "compete" with him.

"I'm not competing with any billionaire," he said. "That same billionaire took 500 people and left them in Be'er Sheva. Now they're seeking defense ministry assistance to take them back. He simply abandoned them."

He added that the defense ministry has been busing Sderot residents to state-owned recreation facilities in Ashdod and Netanyah.

Earlier Sunday, Peretz declared a "special home front situation" status for Sderot and its environs, a status would could pave the way for compensation for residents whose property and livelihoods suffered as a result of Palestinian Qassam attacks on the area.

"The conflict could continue for a while", Peretz said on Sunday, "and we need to change the situation for the residents around the Gaza Strip."

Peretz said Sunday that the miliary is executing efficient and successful offensives in Gaza. "The forces are operating to reduce the Qassam rocket fire, as well as detect tunnels or explosives on the border".

Officials said that the order would allow the government to offer compensation to residents whose property is damaged by the rockets, and to offer other forms of financial support and compensation as well.The status would also enable the government to order workers employed in firms considered vital, including the Israel Electric corporation, hospitals bakeries and local governments, to stay on the job.

But it remained unclear if the compensation would be equal to that received by prople whose property was damaged in war. The declaration will also require government approval, if it is to be extended past the next two days.

The declaration came as Sderot Mayor Eli Moyal demanded that the government declare a state of emergency and take responsibility for its security situation.

Schools will not open in Sderot on Sunday. Thousands have left Sderot over the last four days, some to organized recreation spots and others independently. The Sha'ar Hanegev regional council will send junior and junior high pupils to activities in other areas today. The Eshkol council will close down two schools near the Zohar communities.

Moyal demands state of emergencyMoyal met senior municipal and security officials Saturday night and decided, in view of the town's economic distress, to demand that an emergency situation be declared. This way it will not be the municipality, but the government that is responsible for the town's security.

Peretz and Prime Minister Ehud Olmert agreed Saturday night to speed up the protection of homes in Sderot and communities around the Gaza Strip.

The agreement, which will be discussed in the Sunday cabinet meeting, stipulates that 200 safeguarded rooms will be built each month, with construction beginning immediately.

Shortly after the first rockets fell on Saturday morning, Peretz said that the state's failure to protect its citizens from rocket fire was immense. He blamed the failure to erect a rocket-defense system on the defense ministers that preceded him, as well as on former chiefs of staff, singling out former defense minister, Shaul Mofaz, who previously served as IDF chief of staff.

"Someone decided that the [rocket] fire on Sderot is statistical, and there is no reason to invest in [preventing] it. The threat facing Sderot is not a statistical threat, but a strategic threat," Peretz said.

The southern district police commander said on Friday that police are taking steps to prepare for a Qassam strike on Ashkelon.