Israel Weighs a War in Gaza

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Jim Hollander / EPA

First grade students in Sderot hide under their desks during a drill.

As children in the southern Israeli town of Sderot toddled back to class after summer vacation on Monday, a Palestinian rocket exploded near a gaily painted kindergarten. None of the kids were hurt by the blast, but as one mother who rushed to the kindergarten says, "I found all the children terrified and in tears." They were treated for shock.

On Back to School day, seven rockets fired from the nearby Palestinian enclave of Gaza landed in Sderot, narrowly missing toddlers entering a kindergarten. The Palestinian militants routinely fire rockets from Gaza, but this time those responsible claimed to be retaliating for Israel killing three Palestinian children, who had been gathering fruit and playing hide and seek, the previous week. (The Israeli army had apologized for the three deaths.)

Palestinian rocket fire into Israel from Gaza has continued incessantly since 2003, and Israeli military planners and politicians know that it's only a matter of time before one of the crude homemade rockets hits a school or a supermarket, killing many Israelis.

On Tuesday, Prime Minister Ehud Olmert met with his security cabinet to figure out the terrible equation of how hard Israel should strike back against Gaza when one of these homemade rockets brings death to Sderot. The collateral damage could include President George W. Bush's proposed Middle East peace summit in November, since a major Israeli strike against Gaza would inevitably prompt a stay-away by the moderate Arab states on whose support Washington is counting — Egypt, Jordan and possibly Saudi Arabia.

Well-informed Israeli government sources told TIME that a debate is raging inside Olmert's cabinet over how fiercely Israel should strike Gaza, where 1.5 million Palestinians live densely packed. According to these sources, the hawks, including Deputy Premier Avigdor Lieberman and top military brass heading the South Command, are pressing for an all-out assault on Gaza. This would require four to five divisions of troops, and its aim would be to arrest the leaders of Hamas and destroy the Islamist militant group that seized control of the territory from U.S.-backed President Mahmoud Abbas's militia last June. A full-scale assault, say military strategists, might cause "over a thousand" Palestinian casualties and the loss of "a few hundred Israelis," but it would smash Hamas's military capability and seize an estimated 40 tons of explosives and tens of thousands of weapons, including anti-tank rockets and surface-to-air missiles.

The drawback: Such a raid would scuttle Bush's peace summit, and also leave the Israeli army dangerously over-stretched if war were to break out again in the north against either Hizballah or Syria.

The second scenario: Israel invades a broad swath of northern Gaza as far as the teeming Jabaliya refugee camp, pushing the rocketeers back out of range of Sderot and other Israeli communities. In this plan, Israel would also turn a corridor along the Philadelphi Road, between Gaza and Egypt, into a no-man's land to stop smugglers from bringing more weapons into Gaza through an underground maze of tunnels. Israel would also cut off Gaza's electricity, gas and water, in what deputy premier Haim Ramon described as "a price tag" that Israel should stick on every rocket fired by the Palestinians.

The downside to the second plan: Seizing northern Gaza would mean destroying hundreds of Palestinian houses and displacing thousands of families. It could also raise an international outcry that Israel was imposing a collective punishment on Gazans for having backed Hamas in last January's free elections. It is almost certain that President Abbas, despite his loathing of Hamas, would walk away from U.S. sponsored peace talks with the Israelis in protest. Hamas might also pull out longer-range missiles from its arsenal, able to strike as far as the Israeli port of Ashkelon.

Plan Three, said to be favored by Olmert and Defense Minister Ehud Barak, calls for occasional ground strikes into Gaza and an increase in assassinations of Hamas's political and military leadership. "It wouldn't be Ismael Haniyeh [the Hamas leader and ex-Prime Minister], but it would be those right under him," one source told TIME. Until now, Israel has refrained from targeting Hamas's political leadership since they are not involved in the rocket attacks on Israel — the rocketeers usually belong to Islamic Jihad and other smaller Palestinian militant groups. "We want Hamas on the run so that they can't attack us with rockets or suicide bombers," claimed this source.

Hamas, meanwhile, says it is not afraid of an Israeli siege on Gaza. "The Israelis will pay a heavy price," said one Hamas leader, who claimed that his militia had studied Hizballah's tactics against Israeli in last summer's Lebanon war. That may be bravado, but since its takeover of Gaza, Hamas has been busy fortifying itself against a possible Israeli attack. And Palestinian militants may get increased support from Iran. On Thursday, President Mahmoud Ahmedinejad is hosting a Palestinian militant jamboree with envoys from Hamas and other resistance groups. Israelis say Iran is providing Hamas with funds and military training.

The kindergarten rocket in Sderot narrowly missed causing a major battle between Israel and Gaza's Palestinians. It could be days, or even weeks before one rocket finds its mark. And when that happens, all bets for progress on Middle East peace this fall are off.

With reporting by Jamil Hamad/Bethlehem and Aaron J. Klein/Tel Aviv