Militants fired rockets into Israel on Thursday after warplanes raided Gaza, prompting Israeli officials to threaten wider killing raids, and one minister warning the Palestinian premier should not be immune.
The strikes coincided with an announcement by French President Jacques Chirac and Spanish Prime Minister Jose Luis Rodriguez Zapatero that they, with Italy, were working on an initiative to revive the moribund peace process.
Their declaration drew a swift rejection from a senior Israeli official, a welcome from the Palestinian Authority for an international peace conference,
and a guarded response from the EU's Middle East envoy Marc Otte.
On the ground, however, the two sides remained prey to continued violence, one day after a mother of two was killed when a salvo of Palestinian rockets crashed into Israel in the first such lethal attack from Gaza since July 2005.
Israeli planes carried out five overnight air raids across the Gaza Strip, targeting five buildings the military said were used by militants. Palestinian medics said five people were wounded.
Palestinian militants fired two rockets into southern Israel on Thursday, one of which damaged a chicken coup on a kibbutz, but neither caused any casualties, an army spokesman said.
In the West Bank, a 25-year-old Palestinian militant was killed by an Israeli army sniper during a raid into a West Bank refugee camp before troops also staged an incursion into the territory's political capital, Ramallah.
At a meeting with army chiefs in Tel Aviv, Defence Minister Amir Peretz ordered them to draw up new initiatives for Gaza, army radio said.
"We will move against those who are involved in the firing of rockets, starting from their leaders and down to the last of their terrorists," Peretz said on Wednesday.
His outspoken colleague, Infrastructure Minister Benjamin Ben Eliezer, advocated "targeted killing" operations, branded assassinations by the Palestinians, and warned that prime minister Ismail Haniya should not be immune.
"Targeted killing operations must be broadened, not only against those who fire rockets but against their leaders," he said, in a direct allusion to leaders of Haniya's Islamist Hamas movement, whose armed wing claims rocket attacks.
"If the rockets do not stop, they (Hamas leaders) will have no respite, from the prime minister to the last of them," Ben Eliezer warned.
Nevertheless Israeli leaders freely admitted they had no solution to the near constant rocket threat in the south since troops withdrew from the Gaza Strip in 2005 after a 38-year occupation.
Flying home from California, Prime Minister Ehud Olmert acknowledged that rocket fire would not end in one swoop, but he said that operations would continue "according to circumstance".
"The rocket fire will not end with one blow," he told reporters travelling with him, sentiments echoed by Deputy Prime Minister Shimon Peres.
"We are making all efforts and a lot of people are risking their lives. But the unequivocal way to stop it (rocket fire) completely has yet to be found," the Nobel peace laureate told army radio.
Israel has been waging nearly continuous military operations inside the Gaza Strip for nearly five months, launched in a bid to retrieve a soldier captured by Palestinian militants in late June and also to halt rocket attacks.
More than 300 Palestinians and three Israeli soldiers have since died in the territory, but the rocket attacks continue and the conscript is still a captive.
Despite the violence, Chirac and Zapatero confirmed at a conference in Spain that they and Italy were working on an initiative for peace in the Middle East.
They were seeking a cease-fire, a prisoner swap and an international peace conference, while also backing a prospective Palestinian unity government and a fact-finding mission to the Palestinian territories, Zapatero said.
A senior Israeli official, who refused to be named, rejected the initiative outright as "hasty". European Union envoy Marc Otte counselled caution while a spokesman for the Palestinian Authority welcomed the idea of an international peace conference.