updated 1/3/2008 8:08:59 PM ET 2008-01-04T01:08:59

Israel and Gaza militants escalated their simmering conflict less than a week before the visit of U.S. President George W. Bush, pushing peacemaking into the background with the possibility of a full-scale armed conflict erupting.

Palestinians fired a Katyusha rocket Thursday at the Israeli city of Ashkelon, a weapon with longer range and more potential for damage than the crude rockets militants regularly aim at southern Israel. The Israelis hit back with airstrikes and ground operations that killed nine people, including three civilians.

The intensification seemed to play into the hands of the militants, who reject peace with Israel and see Bush and the U.S. as a tool of the Jewish state. But Israel's government was unwilling to overlook the significance of the Thursday rocket attack.

"The Palestinians have attacked a major Israeli city ... and thus have upped the ante," said government spokesman David Baker. "Israel will not allow any cities to be attacked by Palestinian rocket fire."

Israel strikes back
No one was hurt in the Katyusha attack, but Israel considered the attack an escalation, and its response reflected that. For weeks the Israelis have been conducting pinpoint strikes at suspected Gaza militants involved in the rocket fire. On Thursday they reverted to the tactic of hitting buildings, putting civilians in the line of fire.

In one clash, Israel shelled a house in the southern city of Khan Younis, killing a militant along with his mother, sister and brother. Israeli army spokeswoman Capt. Noa Meir said militants were "intentionally using civilian areas" to fire at troops and blamed them for the deaths.

In another incident, a 14-year-old boy was critically wounded. His limp body, a mangled foot dangling, was rushed into a hospital emergency room.

Among the dead Thursday was an activist from Abbas' Fatah who was among those who returned a day earlier. He was arrested by Hamas and was killed in an airstrike on the prison. Fatah officials accused Hamas of leaving him there as a target after they abandoned the location.

Abbas condemns Israeli offensive
Nabil Abu Rdeneh, a spokesman for President Mahmoud Abbas, condemned the Israeli offensive. "We consider what's going on in Gaza ... as a bloody Israeli message in which Israel shirks itself of any commitment before the arrival of President Bush to the region," he said. He did not mention the Katyusha rocket firing.

In published comments Thursday, Bush said he would not let a future Palestinian state become a base for attacks on Israel.

"I won't lend a hand to the establishment of a terror state on the borders of Israel," Bush told the Israeli daily Yediot Ahronot. Bush is due to arrive Jan. 9.

Palestinian militants pelt southern Israel with crude rockets every day, causing little damage or casualties while badly disrupting life in towns around Gaza.

The Katusha attack
In contrast, the Katyusha rocket exploded in the northern part of Ashkelon, about 11 miles from Gaza — the longest reach yet of a Palestinian rocket.

The Katusha attack recalled the Israel-Lebanon war in 2006, when Hezbollah guerrillas pelted northern Israel with almost 4,000 Katyusha rockets, killing dozens, wounding hundreds, causing widespread damage and showing how the unguided, relatively simple rockets can cause havoc.

Islamic Jihad and the Popular Resistance Committees claimed responsibility for the Katyusha attack. "We are going to launch more strikes in the depth of the entity (Israel)," they said in a joint statement. The Popular Front for the Liberation of Palestine-General Command, a tiny group backed by Hamas, also claimed responsibility.

'It's just madness'
Ashkelon Mayor Roni Mehatzri called for an Israeli invasion of Gaza to stop the attacks, now that his city of 120,000 is suddenly in range. "It's just madness, just madness," he told Channel 10 TV. "Israel should have acted in Gaza a long time ago."

Israeli Defense Minister Ehud Barak says routinely that an Israeli invasion of Gaza is nearing, but previous large-scale ground operations have failed to halt the rocket fire while causing heavy casualties and damage and usually sparking an international outcry against Israel.

Also Thursday, Israel's Supreme Court upheld reductions of fuel supplies from Israel to Gaza, rejecting claims by rights groups that the cutbacks are causing a humanitarian crisis. The reductions are part of Israel's campaign against Gaza militants and the Hamas government there.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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