The Israeli Prime Minister, Ariel Sharon, has given his security forces permission to use artillery to try to stop Palestinian militants launching rocket attacks.
'There are no restrictions on the use of any measures in order to strike at the terrorists, their equipment and where they find shelter', Sharon told his cabinet.
The decision was taken after several rockets were launched from the Gaza Strip.
This morning, Israeli security forces launched a new strike on Gaza and arrested more than 200 suspected militants in the West Bank.
The Palestinian Prime Minister, Ahmed Qurie, accused Israel of trying to wreck hopes of reviving peace negotiations that have been raised by the Israeli withdrawal from Gaza earlier this month.
There were five overnight air strikes in Gaza in response to the rocket attacks on Israeli territory.
Most of the casualties in the air raids, half of them women and children, were injured during a strike against a school north of Gaza City that was run by Hamas.
The unrest was sparked by an incident on Friday at a Hamas rally when at least 15 people were killed in a blast which was caused by explosives packed into a Hamas jeep.
However, Hamas has blamed Israel, subsequently firing dozens of rockets from Gaza into southern Israel that the Palestinian security forces appeared to do little to stop.
The resumption of air strikes and mass arrests could scarcely have come at a worse time for Sharon, who is facing a vote on the date of an election for the Likud leadership.
