Israeli aircraft attack Interior Ministry in Gaza
GAZA, July 5 (Reuters) Israeli missiles tore through the Palestinian Interior Ministry building in Gaza today as Israel kept up nightly air attacks to pressure militants to release an abducted soldier.
The air strike, which wounded at least three people, was launched hours after militants from the governing Hamas movement fired a rocket into a major Israeli city for the first time, an attack that deepened a 10-day-old crisis.
Israeli Prime Minister Ehud Olmert was meeting with top security officials and might order stronger military action in Gaza in response to the attack on the coastal city of Ashkelon, officials said.
Gaza residents were shaken from their beds by the now-familiar sound of a massive explosion as shrapnel and rubble flew from the five-storey Interior Ministry building. The air raid damaged neighbouring apartments, and medics rushed children suffering from shock to hospital.
Israeli aircraft struck the same Interior Ministry complex on June 30, five days after gunmen from Hamas's armed wing and two other factions snatched Corporal Gilad Shalit in a cross-border raid into Israel from Gaza.
There has been little information about Shalit's fate since the 19-year-old tank gunner was captured.
Israeli daily Yedioth Ahronoth on Wednesday quoted Arab mediators as saying seven gunmen were holed up with him in an underground bunker somewhere in Gaza, with a hoard of food.
UPGRADED ROCKET The army said an upgraded Qassam rocket, powered by two engines instead of the usual single motor, flew 12 km (7 miles) from Gaza and slammed into a schoolyard in the centre of Ashkelon, a city of 115,000 and the site of a major power plant.
No one was hurt, but Olmert made clear militants had crossed a red line in their deepest rocket attack yet into Israel.
''This is an escalation without precedent in the terrorist war waged by the Hamas movement that now controls the Palestinian Authority,'' Olmert said in a speech at a U.S. Independence Day celebration at the American ambassador's house.
''This (rocket) attack ... will have unprecedented, far-reaching consequences. The Hamas organisation will be the first to feel them,'' he said, after its Izz el-Deen al-Qassam Brigades claimed responsibility for the strike.
Hamas said in a statement it was not frightened by what it termed Zionist threats. Israel has hinted it could assassinate leaders of Hamas, whose government is under an international aid embargo, if Shalit is not freed.
''If blood is shed in Gaza, the streets and communities of the Zionist entity will not be spared,'' Hamas said.
On Tuesday, Israel ignored an ultimatum by the groups which abducted Shalit to begin freeing Palestinian prisoners.
Olmert termed the demand extortion while diplomats said negotiations to free Shalit had halted.
Israeli armour moved into the southern Gaza Strip a week ago, taking up largely static positions at a disused airport.
Israel has also sent tanks into northern Gaza, the main launching area for Qassam rockets. But it has stopped short of a push into towns, where fighting with militants could be intense.
Militants in Gaza, territory Israel quit last year after 38 years of occupation, have been firing rockets daily into southern Israel, causing few casualties.
Many have hit Sderot, a backwater town, making less of a political impact in Israel than the attack on Ashkelon -- a city which right-wing opponents of the Gaza pullout, which Olmert backed, had predicted would eventually be hit.
REUTERS SK BST1300