protesters in Sderot--photo courtesy of al jazeera image:29425:0::0

This attack came hours after Israel declared that it "would intensify its military assault on the Gaza Strip in response to homemade rockets fired into Israeli towns."

"We know that Khalil al-Hayya was not in at the time of the attack, but there is no word yet on who was in the house," said Al Jazeera reporter Ayman Mohyeldin from Gaza. Al-Hayya is a member of the Palestinian parliament.

The Israeli government said that its "operations will focus on Hamas and the Islamic Jihad who are responsible for the current escalation." It did not, however, approve a large-scale ground invasion.

Israeli Prime Minister Ehud Olmert, who has lost a great deal of credibility since the war on Lebanon, said that "If the measured steps we are taking, in the political and military sphere, do not bring about the desired calm, we will be forced to intensify our response."

Rockets were fired into southern Israel--photo courtesy of al jazeera image:29426:0::0

His remarks were made after fighters in Gaza fired at least 10 rockets at southern Israel. Some of these rockets landed in the town of Sderot. They caused damage but no casualties. Protesters in Sderot called on the government to stop the attacks.

Avigdor Lieberman, Israel's strategic affairs minister, threatened that his party would leave the government if Olmert did not order a large-scale assault against Hamas. He said, "Either Hamas is going to be dismantled, or the government is going to be dismantled."

If Lieberman left the government, however, Olmert would still retain a small majority.

After sundown Sunday, Israel fired a shell at northern Gaza, but no casualties were reported. Earlier, Israel killed three people, including at least one Hamas fighter, in an air strike on a car in Gaza City.

In another strike, Israel said its target was an Islamic Jihad weapons workshop; however, the owner of the building said it was a stereo and video store.

Some in Gaza believe that Israel's military actions contributed to the ceasefire between Hamas and Fatah. Fawzi Barhoum, a Hamas spokesman, said: "No one would condone fighting one another while the Israelis are shelling Gaza."

Over 50 Palestinians died in clashes after Palestinian president and leader of Fatah, Mahmoud Abbas, stationed thousands of Fatah security troops in Gaza City without consulting Hamas, its partner in the Palestinian unity government.