Israeli prime minister Ehud Olmert met with senior military commanders and advisers today to discuss how to respond to the first rocket attack launched by Hamas fighters from Gaza in five months.
Mr Olmert spoke to his defence minister, Amir Peretz, after yesterday's barrage and planned to hold further consultations this morning, according to Israeli officials.
The issue was whether to resume pre-emptive attacks against Palestinian militants in the Gaza Strip. The rising tensions have left the future of the truce in doubt.
Deputy defence minister Ephraim Sneh said Israel was not seeking to raise the level of conflict between the two sides and security officials said a full-scale ground offensive into Gaza was not a preferred option.
"We have no interest in escalation," Mr Sneh told Israel Radio. "We do have an interest in doing what is necessary to reduce as much as possible the level of terrorism."
The head of an Egyptian security delegation in Gaza, Maj. Gen. Burhan Hamad, called a meeting of all Palestinian factions this morning, urging them to maintain the calm "to avert any possible Israeli invasion of Gaza."
He condemned the rocket barrages, as well as Israeli raids earlier in the week that killed nine Palestinians, most of them militants. Egypt frequently acts as a mediator between Israel and Palestinian militants.
Hamas is a partner in the Palestinian coalition government, whose platform calls for a long-term truce with Israel.
But after the Israeli raids this week, Hamas called for a renewal of attacks on Israel. The Islamic militant group said its members fired 41 rockets and 54 mortar shells yesterday in response to the Israeli raids.
Israeli media, citing military officials, said the rocket bombardment apparently had been intended to create a diversion in order to capture an Israeli soldier near the Gaza border. The military refused to comment on the reports.
Hamas-linked militants have been holding a 20-year-old Israeli corporal, Gilad Shalit, captive since capturing him in a cross-border raid last June.
Mr Olmert and Palestinian President Mahmoud Abbas announced the Gaza truce in late November, declaring an end to Palestinian rocket fire and Israeli attacks, including airstrikes at Gaza militants and invasions of towns in northern Gaza.
Israel has stopped most of military activity but keeps Gaza in a stranglehold by frequently closing its vital border crossings, citing security threats.
While Hamas rocket squads stayed on the sidelines, other groups, like Islamic Jihad, have kept up fire of homemade rockets almost daily at Israeli towns and villages just outside Gaza.
AP