ISRAEL: Israel killed seven Palestinians last night in Gaza - among them an Islamic Jihad leader and at least four civilians - in a response to a suicide bombing that killed five Israelis on Wednesday.
The strike was part of what Prime Minister Ariel Sharon vowed would be a "non-stop" military operation.
Israeli troops and artillery were also massed on the border of Gaza and military officials warned that if the violence continued forces would move back into the Strip, just over a month after they pulled out.
Israeli aircraft also targeted access roads to northern Gaza from where militants have fired rockets into Israel, and artillery guns fired range-finding shells ahead of their possible use against the missile launchers.
The suicide bombing in the central Israeli town of Hadera, carried out by a member of the Islamic Jihad, and Israel's renewal of its assassination policy - a senior Islamic Jihad leader was also killed earlier this week in the West Bank - have all but snuffed out hopes of renewing dialogue between the two sides in the wake of Israel's withdrawal from Gaza last month. Islamic Jihad said the suicide attack was retaliation for the assassination strike earlier this week.
The target of last night's assassination, in a refugee camp in northern Gaza, was Shadi Mohanna, a leading Islamic Jihad member.
Witnesses said two missiles slammed into a white Subaru in the Jabalya refugee camp in which he was travelling, just as Palestinians had finished evening prayers in the mosques.
As part of ongoing arrest operations, Israeli troops earlier surrounded the home of an Islamic Jihad leader in the northern West Bank town of Jenin and arrested him.
Mr Sharon vowed a harsh response after Wednesday's suicide bombing - the first major attack inside Israel since the Gaza pull-out - and said that the inaction of the Palestinian Authority in confronting militant groups like Islamic Jihad and Hamas made a military operation unavoidable.
"Unfortunately the Palestinian Authority has not taken any serious action to battle terrorism," he said.
"Therefore our activities will be broad and non-stop until they halt terrorism. . . To my regret, as long as terror continues we shall not be able to move forward [ with peace efforts] as we would have wished."
Palestinian Authority leaders yesterday condemned both the suicide attack and Israel's response.
"We have condemned the Hadera attack," said Prime Minister Ahmed Korei. "It doesn't serve our people's interests, but at the same time we condemn the Israeli aggression."
In the weeks after Israel's pull-out from Gaza, relations with the Palestinians have failed to improve, with attempts to set up a meeting between Mr Sharon and Palestinian president Mahmoud Abbas coming to nought. The two sides are deadlocked over security arrangements at the Gaza-Egypt border, as well as at other crossings into the Strip, which are vital for efforts to economically rejuvenate Gaza.
Israel says it is concerned that if the border crossings are not properly controlled, arms will flow freely into Gaza and Israel will also become more vulnerable to attack.