Israel again warned on Tuesday that it would up its offensive in the Gaza Strip, a day after Hamas movement threatened to teach the Israeli army a 'lesson it will not forget'.
"Gaza should not become a second Lebanon," Immigrant Absorption Minister Zeev Boim told public radio, reiterating a phrase used by Israeli leaders in the past few days.
"Apparently we will not have any other choice but to launch an expanded operation, like Defensive Shield, in order to destroy the stockpiles of weapons and to hit the terrorist organisations," said Boim, a close ally of Prime Minister Ehud Olmert.
Defensive Shield was launched by Israel in 2002, the largest military operation in the West Bank since the 1967 Six Day War, which left more than 200 Palestinians and 29 Israeli soldiers dead and some 5,000 Palestinian detained.
"We have to completely stop the rocket fire and not to allow the terrorists to smuggle modern arms that would upset the balance of power between the forces," Boim said.
The Israeli military overnight fired a missile in the northern Gaza Strip which according to witnesses destroyed an electricity generator that served a large part of the town of Beit Hanun, depriving it of power.
The military said the raid was aimed at members of radical groups Islamic Jihad and the Al-Aqsa Martyrs Brigades, as they prepared to fire rockets at Israel.
On Monday, the armed wing of the ruling Hamas movement declared that it had the "means and arms necessary to confront the Zionist enemy with all our force if it proceeds (further) with military operations in the Gaza Strip."
"If the enemy decides to go towards a large confrontation with Hamas, we will be up to this challenge and are totally ready to resist. We have finished preparations to teach the Zionist enemy a lesson it will not forget," the Ezzedine al-Qassam Brigades said.
The group rejected Israel's claims militants are amassing vast stores of smuggled arms, accusing the Jewish state of "using such allegations to justify criminal operations it seems to have decided to wage in the Gaza Strip."
Palestinian prime minister Ismail Haniya told the weekly meeting of his Hamas-led cabinet that Israeli "accusations" of arms smuggling are "lies."
"The occupation presents many excuses to justify its huge aggression," he said.
Israel's offensive has wreaked havoc in the impoverished territory that with a population of 1.4 million people is one of the most densely-peopled places on earth.
In addition to the military incursions, the strip has been living on rationed power since Israel bombed its sole power plant in late June.