Israel launched an air raid on militants in Gaza City on Sunday, killing an elderly man, a day after aborting a planned strike on a house where crowds of Palestinians formed a human shield.
The latest military action also wounded nine people, including two members of Hamas's armed wing. It came as Israel lashed out at a UN resolution calling for a probe into a botched shelling against Palestinians this month.
Prime Minister Ehud Olmert criticised Friday's General Assembly resolution asking for a fact-finding mission to investigate the Israeli shelling that killed 19 Palestinians, mostly women and children, in Beit Hanun.
"I view it severely," Olmert told ministers gathered to discuss the ongoing battle against Palestinian rocket attacks, as another three Israeli civilians were wounded and seven projectiles exploded in the Jewish state on Sunday.
"We have no doubt that it is the State of Israel which must respond to attacks on civilians. We have expressed our deepest regret over this.
"But those who preach morality and roll their eyes have yet to see fit to initiate a resolution in condemnation of those who are shooting with the goal of hitting civilians as a long-range, systematic policy," Olmert added.
"With this attitude, there will be no co-operation from Israel," Olmert was quoted as saying by an official, leaving it clearly understood that the authorities would not cooperate with any UN probe of the Beit Hanun shelling.
The premier vowed to do everything to help residents on the frontline of rocket attacks as the air force carried out another Gaza strike targeting a car carrying two militants from Hamas's Ezzedine al-Qassam Brigades.
The Palestinian resistance fighters were wounded, one critically, and a 70-year-old local resident killed when at least one missile slammed into the car, gutting the vehicle.
The Israeli military confirmed the strike, which came after the group claimed the latest rocket attack on Israel, against "a vehicle carrying senior Hamas terrorists" involved in recent strikes.
Defence Minister Amir Peretz, who has warned militants will pay a heavy price for rocket attacks, telephoned Palestinian president Mahmud Abbas to urge him to intervene to stop fire against the Jewish state, a spokesman said.
"Israel will not tolerate a continuation of this fire," he told Abbas, after the military scrapped an air strike on a militant's home in northern Gaza when several hundred Palestinians formed a human shield there.
Hundreds of Palestinians were celebrating on Sunday, with Ahmed Fuad Barud, a militant in the radical Popular Resistance Committees saying "this is a victory for the Palestinian people. It is a defeat for the Israeli F-16s".
More than 300 Palestinians and three Israeli soldiers have died in Gaza since Israel launched operations there in late June in a bid to recover a soldier seized by resistance fighters, including from Hamas, and halt rocket attacks.
On Wednesday, a salvo of rockets, claimed both by Hamas and Islamic Jihad, killed a mother of two in Sderot. This was the first such deadly attack since Israel withdrew from Gaza in 2005 following a 38-year occupation.
Two days later, the UN General Assembly overwhelmingly passed a resolution urging an immediate end to all acts of violence on both sides, including the Israeli offensive in Gaza and Palestinian rocket firing into Israel.
The text also asked the UN secretary general to set up a fact-finding mission to probe Israel's shelling in Beit Hanun on November 8.
Israel has said a technical error was responsible for the fire and expressed regret, yet faced with ceaseless Palestinian rocket attacks, cabinet ministers united in criticising what they called "hypocrisy".
"Regrettably no one is suggesting that an investigative committee be formed in the terrorist organisations, in the Palestinian Authority and in Hamas, which are doing everything possible to harm innocent civilians," Peretz said.
With rocket attacks continuing and the conscript still captive, Olmert said there was "no magic solution" to the rocket attacks despite calls from several ministers for targeted killing operations against Hamas leaders.