Israel pounds Gaza, Palestinian attack kills 1

GAZA, May 22 (Reuters) At least five Palestinians and an Israeli woman were killed in fresh attacks by both sides and a senior Israeli cabinet minister said all Hamas leaders involved in cross-border rocket fire could be targeted.

The woman's death in the southern Israeli town of Sderot marked the first fatality in a Palestinian rocket attack since November and is likely to stoke further Israeli anger at what Foreign Minister Tzipi Livni called an ''intolerable'' situation.

Israeli-Palestinian violence has surged in recent days, while Palestinian President Mahmoud Abbas's Fatah faction and the militant Hamas group have struggled to maintain calm between their own fighters following weeks of internal fighting.

The latest Israeli air strikes destroyed a wood workshop and a metal foundry, Palestinian witnesses said. The military often targets such places, saying militants use them to make or store weapons. There were no immediate reports of casualties.

Islamic Jihad, the Popular Resistance Committees and Hamas all claimed responsibility for the attack on Sderot. Hamas had avoided such strikes after most militant groups declared a truce months ago but had renewed them following Israeli violence.

Abbas said Israel's attacks would have ''grave consequences for the entire region'' and that militants should stop their rocket fire ''so as not to give the Israelis the excuse they use to justify their attacks that have killed innocent victims,'' said the Palestinian president's spokesman, Nabil Amr.

Israel's security cabinet decided on Sunday to escalate military action in response to some 150 rockets fired from Gaza since last week, which have put political pressure on Prime Minister Ehud Olmert.

''It is our obligation to harm the rocket launchers and our obligation is to continue to harm Hamas,'' Livni told a news conference in Sderot with European Union Foreign Policy Chief Javier Solana.

OLMERT BOOED Olmert visited Sderot hours later, where several people booed him, shouting ''disgrace!''. Dozens of Israelis also burned tyres on a street. They scattered after a siren wailed signalling incoming rocket attacks.

Palestinians fear Israel may soon raid Gaza should the violence continue. Several vehicles and artillery batteries have been stationed near the northern border for days.

In Gaza, Palestinian women dressed in black, donning masks with the words ''al-Aqsa Brigades,'' which is part of Fatah, and clutching rifles told reporters they were ready to commit suicide bombings against any Israeli troops who entered Gaza.

An Israeli air strike killed at least four members of Islamic Jihad on their way to launch rockets at the Jewish state. Israeli National Infrastructure Minister Binyamin Ben-Eliezer said Israel should target all militant leaders.

''I don't distinguish between those who carry out the (rocket) attacks and those who give the orders. I say we have to put them all in the crosshairs,'' he told Israel Radio.

Israel's internal security minister said Hamas exiled leader Khaled Meshaal, whom Israel tried to assassinate in Jordan in 1997, and Haniyeh, who lives in Gaza, could be targeted.

Thousands of Hamas supporters took to the streets of Gaza City and gunmen fired into the air, vowing revenge, a day after an Israeli air strike on the home of Hamas politician Khalil al-Hayya.

''We will keep to the same path until we win one of two goals: victory or martyrdom,'' Palestinian Prime Minister Ismail Haniyeh, a Hamas leader, said at the funeral service.

One man was killed in an earlier Israeli air strike on what the Jewish state called a rocket manufacturing facility and Palestinians described as a stonemason's shop. The air strikes also cut electricity to about 50,000 people.

Abbas will go to Gaza today to speak to leaders about maintaining law and order, after weeks of internal fighting, and perhaps renewing a truce with Israel, Foreign Minister Ziad Abu Amr said.

REUTERS SS KP1457