Israel says it is willing to send 3,000 troops into the Gaza Strip to stop Hamas rocket attacks.
Army chief Lieutenant General Moshe Yaalon told the Cabinet he is prepared to send an infantry brigade into Gaza, if necessary, to stop the Hamas onslaughts.
In the past three years of fighting, Israel has carried out several ground offensives in Gaza, but has shied away from reoccupying large areas of the densely populated coastal strip, instead focusing on air strikes.
However, Israeli defence Minister Shaul Mofaz said yesterday he was ready to order a ground offensive if rocket fire does not cease. Prime Minister Ariel Sharon told his cabinet that strikes against Palestinian militants will continue.
Fighting has escalated sharply in Gaza, with Israel killing 10 Hamas operatives and a bystander in five missile attacks, and Hamas firing mortars and rockets toward Israeli communities, including the coastal city of Ashkelon.
A power struggle between veteran Palestinian leader Yasser Arafat and his prime minister, Mr Mahmoud Abbas, is intensifying, with clashes over key appointments and control of security forces.
Several Palestinian MPs, including Arafat allies, are lobbying to oust Mr Abbas later this week after he presents a report on his first 100 days in office to parliament. It remains unclear whether the session will be followed by a vote of confidence.
Israeli Foreign Minister Silvan Shalom said the already troubled "road map" peace plan would be derailed if Mr Abbas is ousted.
Mr Arafat reluctantly appointed Mr Abbas as the Palestinians' first prime minister in April under pressure from Israel and the United States, which have accused Mr Arafat of blocking peace efforts.