Israel, Hamas exchange fire

An Israeli helicopter air strike killed two Palestinian militants from Hamas in Gaza after a homemade rocket fired by members of the Islamist group seriously wounded an Israeli civilian, medics said.

The Israeli army confirmed the strike, saying the helicopter fired a missile shortly after the men launched a rocket from northern Gaza. They were the first Hamas fighters killed by Israel since November. Three militants were also wounded.

A second Israeli helicopter air strike yesterday struck close to a car being driven by Hamas militants, but they escaped, witnesses and medics said. A bystander was wounded.

Defence Minister Amir Peretz ordered military chiefs to prepare contingency plans to strike at Gaza militants including those in the Hamas-led government who may be involved in rocket fire at Israel, Israeli media reported.

There has been an escalation in violence in the past three days, with Hamas threatening a resumption of the type of attacks it has spearheaded against Israel since an uprising began in 2000, including suicide blasts and car bombings.

Hamas took over the Palestinian government in March after winning a January election. It is sworn to Israel's destruction.

Israel's strikes came hours after an Israeli man was wounded when a makeshift Hamas rocket landed near a school in the Israeli town of Sderot, near the Gaza border. A hospital official said the 60-year-old man was in a serious condition.

A second Israeli in Sderot was lightly wounded from shrapnel in a later rocket firing, the army said.

Palestinian militants frequently fire rockets into Israel but rarely cause casualties. The last time an Israeli was killed by a rocket strike was last July.

The killing of the Hamas militants was the first by Israel since the ruling Islamist group ended a 16-month truce on Friday after seven Palestinians, including three children, were killed on a Gaza beach on a day of Israeli shelling. Israel has said the killings were a mistake, although it has not admitted responsibility. Prime Minister Ehud Olmert has expressed his condolences and promised an investigation.

Since ending its truce, Hamas has fired three dozen rockets into Israel, mostly towards Sderot.

Some Sderot residents launched a hunger strike outside Mr Peretz' s house in the town, pressing for a tougher response to the rocket strikes. Others said they were thinking of leaving.

Israel has responded with air strikes on Gaza, the coastal strip it withdrew from last year after 38 years of occupation.

Mr Peretz told the cabinet that no Hamas member was off limits if the rocket attacks continued. "I emphasise in the most clear way that we will act against all who are involved in terror, including Hamas members," he said.

Mr Peretz later urged defence chiefs to draw up plans to strike at those responsible for planning and firing rockets, but overruled generals who urged swift action, Israeli reports said. His spokeswoman could not immediately be reached for comment.

Hamas politicians vowed to avenge Israel's actions. "Blood for blood and resistance for violence,"Hamas lawmaker Mushir al-Masri said. Mr Olmert yesterday flew to Britain and would later head for France, where he is expected to push for a strong European stance against Hamas and to discuss Iran's nuclear programme.

The United States and Europe have demanded Hamas recognise Israel, disarm and abide by existing peace agreements.

The escalation of violence coincides with growing division within Palestinian politics.

President Mahmoud Abbas has called a July 26 referendum on a statehood proposal implicitly recognising Israel, a move rejected by Hamas. Hamas plans to challenge the referendum in an emergency session of parliament today, Hamas lawmakers said.