Residents of the battered town of Sderot blocked the main highway entrance into Jerusalem as the Cabinet met, demanding government action after doctors amputated 8-year-old Osher Twito's leg following a rocket attack that also wounded his 19-year-old brother.

Along with clamouring for a full-scale invasion of northern Gaza to take over the areas where militants have been launching the rockets, there were calls from the Cabinet for assassinating Hamas political leaders and to wipe out a Gaza neighbourhood.

Over the weekend, with growing defiance and confidence, Hamas militants called on Israelis to flee from border towns as the rockets rained down. The two brothers were hurt on Saturday night when a rocket exploded next to them in Sderot, one of dozens that hit in and near the town of 20,000 less than a kilometre from the fence around Gaza.

The serious injury to the small child galvanised Israeli outrage.

'He loves playing soccer, but he will never play again,' Osher's mother, Iris Twito, wailed on Channel 2 TV. 'How can he play now with no leg?' Cabinet Minister Meir Sheetrit fumed, 'We must take a neighbourhood in Gaza and wipe it off the map,' after warning citizens to flee.

At nightfall, about 20 Israeli army vehicles rolled into northern Gaza, where most of the rockets are fired, witnesses said. The military called the operation 'routine.' In an exchange of gunfire at the border, a Palestinian militant was killed.

Late on Sunday, Palestinians fired a rocket at Israel, only the second of the day, compared to dozens in the previous days.

In a public statement at the beginning of the weekly Israeli Cabinet meeting, Mr Olmert said the upsurge in Palestinian rocket attacks is a response to Israel's own military strikes, claiming that 200 Gaza militants have been killed in recent months 'as a result of initiated, aggressive, planned and comprehensive activity' by the Israeli military and security.

'Anger not an operational plan'
As the demonstrators from Sderot approached his office, Mr Olmert declared, 'anger is not an operational plan.' Instead, he said, 'We must act in a systematic and orderly fashion over time.' Mr Olmert indicated that Israel might target Hamas political leaders. 'We will continue to reach all the responsible terrorists, including those who dispatch and operate them,' he said.

On his way to Germany for talks later Sunday, Mr Olmert called for patience. 'There is no solution of one operation or one bomb,' he said. 'It takes time.'

Up to now Israeli military strikes have been aimed at rocket squads and militant leaders. In 2004, however, Israel killed the founder of Hamas and his successor in two airstrikes four weeks apart.

Hamas overran Gaza in June, expelling forces loyal to moderate Palestinian President Mahmoud Abbas. Gaza's Hamas government is headed by Prime Minister Ismail Haniyeh, deposed by Mr Abbas after the takeover. Mr Abbas named a new government that effectively rules only the West Bank.

Israeli Foreign Minister Tzipi Livni denounced the daily rocket attacks, rejecting the world's tendency to dismiss the violence 'simply by saying there are casualties on both sides.'

Mr Livni said that while Gaza militants are targeting civilians, 'Israel, according to international law, has the right and duty to defend its citizens.' Mr Livni, who heads Israel's negotiating team with Mr Abbas' government toward a peace accord, said such an agreement would be impossible as long as Hamas rules Gaza and foments violence.

Sanctions
'There is no hope for any kind of peace or the vision of the Palestinian state which includes the Gaza Strip without real change on the ground,' said Mr Livni, who leads Israel's negotiating team.

In recent months, Israel has augmented its military strikes with economic sanctions on Gaza, cutting back fuel supplies and sharply restricting the entry of other goods through Gaza crossings it controls.

On Thursday, it cut about 1 per cent of the electricity it supplies to the territory in an effort to pressure Hamas to stop the rocket barrages. Residents said rolling blackouts in Gaza last 8-12 hours a day.

Gas station owners refused to accept Israeli fuel shipments, saying they covered only a third of their needs. Aid workers said on Sunday the Gaza City power plant was working at full capacity but had no fuel reserves.

Vice Premier Haim Ramon said Israel should not make do with symbolic power cuts.

'If they fire a rocket, then there should be no electricity, or water or fuel' that day, he said. -- AP