Israel decides to "intensify" Gaza strikes

JERUSALEM, May 20 (Reuters) Israel decided today to step up strikes against Gaza militants involved in rocket attacks against southern Israel, but stopped short of ordering a wider offensive in the coastal strip, officials said.

An Israeli statement said there would be a diplomatic effort launched aimed at resolving the tensions.

The cabinet statement said Israel would ''permit its defence establishment to intensify operational steps aimed at reducing rocket fire'' and target those in Hamas and Islamic Jihad deemed responsible.

In an apparent bow to pressure from world leaders to rein in its offensive, the Israeli decision stopped short of expanding military operations launched a week ago.

Prime Minister Ehud Olmert had threatened earlier ''we will be forced to intensify our response'' if gunmen continued firing rockets from Gaza.

About 10 rockets were fired today, four striking in southern Israel, causing no injuries, the Israeli military said.

Israel killed three suspected Hamas militants in a Gaza air strike earlier today.

In Gaza, the latest Egyptian-brokered ceasefire appeared to be holding after more than a week of fierce internal fighting between Hamas Islamists and President Mahmoud Abbas's secular Fatah faction, in which 49 Palestinians have been killed.

The Palestinian fighting has been the most deadly in Gaza since Hamas and Fatah formed a unity government in March.

Hamas has accused Israel of carrying out attacks against it in a bid to help Fatah.

DOZENS KILLED Israel's bombing campaign against Hamas -- Olmert said militants have fired more than 120 rockets from Gaza since Wednesday -- has killed at least 21 Palestinians including, local residents said, some 5 civilians.

Olmert said dozens of Hamas militants had been killed in the Israeli strikes over the past several days.

''Hamas people are paying, and will pay, a very heavy personal price for these attacks on the residents of Sderot and nearby communities,'' he said in broadcast remarks.

The wave of rocket attacks has caused injuries but no deaths in Sderot and the surrounding area where a total of 40,000 people live.

Israeli Defence Minister Amir Peretz said Israeli confrontations with Hamas ''could continue for some time''.

Israel has moved an undisclosed number of tanks, armoured vehicles and ground forces into areas just inside the Gaza border, raising Palestinian fears of a wider offensive into the territory Israeli settlers and soldiers quit in 2005.

''We are assessing the situation every few hours and will definitely decide how to continue our activities,'' Peretz said.

Olmert is struggling to stay in office after an official report criticised his handling of last year's Lebanon war and is under domestic pressure to stop the rockets without getting bogged down in another costly conflict.

At the same time, he knows a wide-ranging Israeli military response in Gaza could have a major influence on the course of Fatah's power struggle with Hamas, which unlike Abbas's group, does not recognise Israel.

REUTERS SR VC2320