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The security cabinet yesterday authorized the Israel Defense Forces to intensify air force attacks on the Gaza Strip and carry out assassinations of senior Hamas and Islamic Jihad officials. However, sources in the IDF feel that the measures taken so far will not deter Hamas, which will continue firing rockets at Sderot.

The decision to target Hamas and Islamic Jihad officials, political sources in Jerusalem say, means that only those linked to the military branches of the groups will be attacked, not the political leaders, which Israeli intelligence does not believe are directly linked with the attacks against Israeli towns.

"Further, more drastic steps," will be considered, a statement read following the cabinet meeting, "against those responsible for the current escalation."

The same political sources stressed that all the proposals put forth by the IDF were authorized and that the political leadership and the army brass were in complete accord.

Prime Minister Ehud Olmert said that "I do not discount any option, and if the escalation continues we will consider further action."

Opposing the security cabinet's decision, Strategic Affairs Minister Avigdor Lieberman demanded that the Philadelphi Route, running along the southern border of the Gaza Strip, be occupied by the IDF. Lieberman said that a 200-meter-wide buffer needs to be created along Philadelphi to prevent the smuggling of weapons through tunnels connecting Rafah and the Sinai.

Public Security Minister Avi Dichter opposed Lieberman's idea, arguing that it is inappropriate to deploy the IDF on such a narrow strip of territory, putting the troops between Egyptian forces and Palestinian militants.

Foreign Minister Tzipi Livni recommended that some form of obstacle be constructed along the Gaza Strip border with Egypt to prevent smuggling.

The cabinet decided that the possibility of building such an obstacle should be discussed with Egyptian, Palestinians and American officials during one of the routine meetings dealing with security issues.

Representatives of the Foreign Ministry and the National Security Council presented the security cabinet with diplomatic alternatives for addressing the crisis in the Strip.

Security sources said that the efforts to bolster the "moderates" in the Gaza Strip, a term used to describe those affiliated with Palestinian Authority Chairman Mahmoud Abbas, have failed.

These sources said the moderates have grown stronger in the West Bank, where Israeli security forces are countering extremists of Hamas and Islamic Jihad.

The security sources also assessed that expanded IDF activities in the Gaza Strip will both benefit Israel and bolster the presence of the pro-Abbas forces there.

The Prime Minister asked the ministers to be aware of the dangers inherent in any expanded military operation. He said this would formally void the cease-fire with Hamas, even though it has not been kept, and warned that there may be a resumption of suicide bombings. Olmert also warned that an escalation could also include the use of long-range rockets by Hamas, targeting communities that are not normally hit by the fighting.

Olmert also stressed the possibility that the abducted IDF soldier, Gilad Shalit, held for nearly 11 months as a hostage by a cooperative of militant groups in the Gaza Strip, could be harmed by his captors.

"We have a kidnapped soldier, but the country is also being hit by Qassam [rockets], and it is impossible to shut down our activities because of this," Dichter said, and Olmert agreed. Transportation Minister Shaul Mofaz said that Israel needs to evaluate its overall strategy toward the Palestinian Authority.

"Do we want to topple the Hamas government, and if so, how? Is there a political or military possibility to do so? And if not - will we act so that Hamas will change, soften its stance, and become a partner in dialogue?" Mofaz said.

Dichter asked that the defense establishment prepare an overall plan for dealing with the Gaza Strip, to include both offensive and defensive operations.