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A shopping mall in Ashkelon was hit yesterday afternoon by a long-range rocket fired from the Gaza Strip injuring around 90 people, four of them seriously. Two militant groups, Islamic Jihad and the Popular Resistance Committees, claimed responsibility.

Among those seriously hurt are a 24-year-old mother and her infant daughter, both flown to Sheba Medical Center, Tel Hashomer, for treatment. They suffered head injuries.

Two others sustaining serious injuries were rushed to Barzilai Medical Center in Ashkelon for emergency surgery. Most other injuries were light.

Yesterday's attack made recent statements by the military intelligence chief, Major General Amos Yadlin, prophetic. He had told Haaretz that "every community within a 40-kilometer range may come within range of the Hamas rockets: Ashdod, Kiryat Gat, even Be'er Sheva." He spoke in an interview to be published in full tomorrow in Haaretz Magazine.

The Israeli leadership has not yet decided on the nature of the response to the latest escalation in the rocket attacks.

Security sources told Haaretz that after the visit to Israel by U.S. President George W. Bush, which ends on Friday, the Israel Defense Forces will step up offensive operations in the Gaza Strip. But the source said that at this time there are no plans to permanently take over parts of Gaza.

Speaking at a conference marking Israel's 60th anniversary, Prime Minister Ehud Olmert said Israel will take the necessary steps to stop violence from Gaza. He called the Ashkelon attack intolerable and unacceptable.

"The government of Israel is committed to stop it," he said.

Olmert blamed the attack on Hamas, in control of Gaza since its violent takeover ousted Fatah last June. "We will not be able to tolerate continuous attacks on innocent civilians," Olmert said. "We hope we will not have to act against Hamas in other ways with the military power that Israel hasn't yet started to use in a serious manner in order to stop it."

The Hutzot Mall in Ashkelon is normally full by noon, as many people frequent its many restaurants or visit the Clalit Health Maintenance Organization clinics on the upper floor.

When the Grad Katyusha rocket struck, hundreds of people were in the mall. At the time of the attack the alarm meant to warn Ashkelon residents of incoming missiles did not work. The reason: the IDF decided to disconnect the system because five cases of false alarms in the past month - which led to panic.

According to a Home Front Command officer, the decision was reached at the most senior levels of the defense establishment and resulted from daily assessments of threat levels carried out by GOC Southern Command and Military Intelligence.

"There was no need to inform the residents that the alarm system was not working," the officer said. "It is not clear how the Home Front Command will act differently in the future in light of the large number of false alarms."

The officer stressed that there had been no early intelligence of plans by Palestinian militants to target Ashkelon.

Last night, Ashkelon Municipality officials blamed the Home Front Command for failing to adequately protect the city.

But defense officials rejected this, saying that the Color Red alarm system had experienced difficulties because the radar used to identify rocket launches had been unable to distinguish between rockets headed for Ashkelon and those targeting other communities near Gaza.

A decision was made last night to resume the Color Red alarm and continue its use permanently.

Ashkelon has been targeted by Palestinian militants from the Strip since July 2006, during an escalation in fighting with the IDF. At that time the militants fired upgraded Qassam rockets that struck the city's southern neighborhoods. One of those rockets scored a direct hit on a schoolyard, but there were no casualties.

During the Second Lebanon War, the first Grad-type Katyusha, which security experts say was made in Iran, struck the city's marina, causing no casualties.

Qassam rockets continued to rain on the city's southern neighborhoods and the southern industrial areas, without much media attention.

In February, a series of Grad rocket attacks caused significant damage and panic in the city of around 120,000 people.

Since then, at least one rocket struck fields north of Ashkelon, and Haaretz reported that Islamic Jihad had managed to upgrade its rockets, making them capable of striking targets 20 kilometers away.

Deputy Mayor Levy Shafran charged the government with not doing enough, saying that "to date we had been lucky, but it seems that the government of Israel requires blood and injuries in Ashkelon for it to understand that the situation here is intolerable. We are not prepared and we cannot live this way, and we expect a definitive and determined action against the terrorist organizations."

Defense Minister Ehud Barak and MKs Eli Yishai, Avi Dichter and Yitzhak Cohen said after the rocket attack that they would not attend a scheduled dinner with U.S. President George W. Bush. Instead, they traveled to Ashkelon to inspect the situation on the ground.

"We should not have gotten into this situation, and it is time for us to speak less and act more," Yishai said.

Likud MK Yuval Steinitz said that "the government of Israel, which has time and time again been warned of the foot-dragging against Hamas, cannot wash its hands of this. Instead of negotiating an imaginary peace, it is time for the government to instruct the IDF to decide the real war."

MK Arieh Eldad (National Union-NRP) recommended the Ashkelon mayor to call for an immediate general strike in the city, including the education, trade and transportation systems, until the government "assumes responsibility once again for the lives of its citizens."

In an interview with Army Radio, Deputy Defense Minister Ephraim Sneh said that Israel must break the Hamas stronghold in Gaza. Sneh said the rocket that hit the mall was made in Iran and launched from Gaza with the intention of hitting Ashkelon. "This is part of the Iranian war on Israel, which intends to gain control of the Middle East," he said.

Sneh said the attack was a reminder of why Israel is not interested in negotiating with Hamas. "There is no foundation for it and we got the proof for that today," he said.

The Labor MK's views were echoed by the MI chief, who told Haaretz that Hamas is not interested in peace with Israel.

He said that Hamas is not interested in peace with Israel because it is unwilling to recognize the State of Israel. The group is willing to accept a long-term cease-fire (hudna) only in exchange for a Palestinian state within the 1967 borders, including Jerusalem, and with refugees returning to their homes. "As long as those are Hamas' conditions, a hudna appears to be impossible," he said.

On the likelihood of agreeing on a lull (tahadiyeh) in the fighting with Hamas, with Egyptian mediation, Yadlin said that "the tahadiyeh, as agreed between [Egyptian intelligence chief] Omar Suleiman and Hamas perhaps solves the problem of terror from Gaza for the short term. But in the long term, it does not provide an answer to the ongoing smuggling or the Hamas buildup. Separating the issue from the release of [the abducted soldier] Gilad Shalit is also very problematic."

In discussing Israel's strategic situation vis-a-vis Iran, Hezbollah, Syria, the Palestinian Authority and Hamas, Yadlin said Hamas is trying to create deterrence against Israel similar to that of Hezbollah in Lebanon. Part of this effort comes by broadening the range of its missile strikes in Israel.

Yadlin says Hamas has already significant capabilities, and several dozen rockets capable of striking targets in a radius of 20 kilometers, and that the group seeks to extend that range.

"If this matter is not dealt with, Hamas will bring more cities within its range of fire," Yadlin said.

He pointed out that Hamas is preparing its defensive positions in case the IDF invades the Gaza Strip. "Hamas' ground deployment is based on subterranean fortifications, explosive devices and snipers. Hamas has also set up a number of brigade-size units," he said.