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In a high-level defense consultation yesterday, Prime Minister Ehud Olmert decided that Israel will avoid a broad military response to the Hamas rocket barrage on Tuesday, Independence Day. The scope of offensive action could expand but no broad ground offensive into Gaza territory was approved. The consultation focussed on developing policy and not on developing a target list.

Olmert summarized the meeting with a warning to the Palestinians that Israel "will not hesitate to take harsh measures against those who try to infringe on its sovereignty by firing rockets into our territory, attempting to harm soldiers or other means." Sources in Jerusalem said that if Hamas activity against Israel escalates, broader military action in the Gaza Strip will be reconsidered.

In the Jerusalem meeting, Olmert, Defense Minister Amir Peretz and Israel Defense Forces Chief of Staff Gabi Ashkenazi agreed that at this stage there is no justification for a major ground offensive in the Gaza Strip, despite the judgment that Tuesday's Qassam attack was intended to distract attention from a plan to kidnap an IDF soldier. The attempt was foiled by IDF alertness.

GOC Southern Command Yoav Galant disagreed with the ruling consensus. For some time he has been warning that Gaza is becoming a "second Lebanon" and that if Israel doesn't act against the "rocket industry" and weapons there it will pay a higher price in a future confrontation. Other senior defense officials believe a ground operation would be difficult to justify now, both to the Israeli public and in the international arena.

One source said after the meeting that there was a general understanding that "if you escalate, you must be willing to go all the way." There was general agreement by participants that the benefits of a broad military operation at this time were not clear.

Olmert's aides published a statement at the end of the consultation indicating an ever-escalating series of Hamas activities. "Israel views gravely the acts of terror in which Hamas has engaged in recent weeks. After a short period of apparent partial honoring of the cease-fire in the Gaza area, the Hamas movement has decided to violate it. This began with the shooting at an Israel Electric Company worker in the Karni crossing area a few weeks ago, continued with a series of attempted attacks on Israeli targets, with the firing of rockets and culminated in the Independence Day events."

The statement stated that "Israel needed no proof that Hamas is a terror organization that never abandoned terror and has acted on that in the international community since the establishment of the Hamas government. Hamas seeks to maintain a terror arm while simultaneously enjoying the fruits of participating in the unity government. This contradiction cannot be resolved."

Defense and political sources refused to give details on the military measures that were approved. They apparently include an escalation of operations implemented in recent weeks, including stepping up activity in the one-kilometer buffer zone inside the Gaza border fence. In addition, the hunt for people involved in building or launching Qassams will be intensified. The targeted assassination of Hassam military wing commanders is also thought to be on the agenda, although the sources refused to comment on this.

Avi Issacharoff adds: Several Gaza Palestinian organizations announced rocket launches against Israel yesterday, although Israel called the border relatively calm and said no Qassams were fired into Israeli territory.