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About a year ago, Danny and Keren Dahan from Sderot were trying to decide whether to give their 4-year-old twins Stav and Raveh a baby brother or sister. But the escalation of Qassam rockets made the decision for them. "We decided that this is not the time or place to have another baby; it would be irresponsible," Dahan says.

It seems the Dahans are not alone. Statistics Haaretz obtained from the health and interior ministries show a 15-percent decline in Sderot's birth rate in the first half of this year from the same period last year - to 154 from 182.

The decline was not felt dramatically after the Qassams started falling in 2001, but only when the firing escalated in May 2007.

The declining birth rate also results from families leaving the city; their numbers can be gauged by registrations for the city's schools because children whose families live in Sderot are not eligible to register at schools outside the district.

Education Ministry statistics show a 9-percent decline from last year in registration for schools. The number of children in the school system is expected to decline further as dozens more families, mainly younger ones, make good on their plans to leave town after the school year.

For example, 285 kindergarten graduates have registered for first grade in Sderot for next year - 25 percent less than last year.

The director of the Sderot municipality's education department, Miriam Sasi, says that families may indeed have left town, but it is too soon to tell because families tend to sign up for school toward the end of the registration period. Still, Sasi says there is a decline in the number of children registered for school in Sderot from year to year.

If it continues, the result will be "fewer jobs, fewer investments in informal education such as enrichment and community centers," along with reduced school-related construction, Sasi says.

"The main thing is the uncertainty," Dahan adds, explaining why he and his wife have not expanded their family. "You think, what if the situation gets worse? We might decide at some point to leave town. How will we manage financially? You hear about grown children wetting the bed, about psychological treatments for them. So then I say 'why should I have another baby, so he'll sing about air raids in kindergarten?'"

Dahan says continued tension has ravaged the city. "There's tension between spouses, and the children take more energy and investment than before. So you say to yourself, now's not the time for another baby. Let's deal with what we have."

About 1,000 Sderot residents, among them 200 children, have turned to stress-treatment centers due to severe anxiety attacks. Hundreds more prefer to seek treatment outside of town. Y.S., 28, is one of them. A year ago she was pregnant with her first child.

"There were something like 50 Qassams a day. We went to live with my mother-in-law because she didn't have a reinforced room and my husband didn't want to leave her alone," she says. One evening the alarm sounded. Y.S. and her mother-in-law took shelter in the bathroom, as usual. A Qassam fell in the yard nearby. "There was a loud boom and then maybe 50 Qassams landed all around. I started to scream 'how will I have a baby here? How will I raise children here?'"

Y.S. was taken to Ashkelon's Barzilai Medical Center suffering from shock. "I collapsed that whole week. Then I started having pains everywhere in my body. We went to the hospital and they told us the baby was dead," Y.S. said, her voice wavering.

Y.S.'s doctors could not directly link her shock to the miscarriage, but she is sure they are connected. "Until the day the Qassams fell the pregnancy was fine," she says.

The head of Sderot's mental health clinic and shock treatment center, Dr. Adriana Katz, confirmed that there have been a number of miscarriages due to shock. Carrying a baby to term requires calm, which does not exist in Sderot, she says. "The moment a 'Qassam generation' comes into being that knows no different, no one can expect a massive or normal birth rate," Katz says.

Katz says people's sex lives have also been affected. "There are daily problems that have to be dealt with, running around to treatment and the National Insurance Institute and the property-tax office. People still haven't fixed their homes that were damaged," she says. "Many people are suffering from depression and anxiety and are taking medication, which affects sexual desire."

Katz also explains that natural hierarchies have been damaged in families who must remain for long periods in their reinforced rooms because parents no longer have their own room. "It creates unwanted dependence. Order and privacy are hampered and life has a much less healthy order to it," Katz says.

Y.S. says she is still in psychological treatment a little over a year after she miscarried. "My husband and family say getting pregnant again might help us forget, but I don't want to, not in Sderot. It's a crime to bring a child into the world here," she says.