updated 2/6/2008 5:13:17 PM ET 2008-02-06T22:13:17

A rocket fired from Gaza Wednesday wounded two young sisters as they played outside their home, Israel's air force attacked Gaza militants and a top Israeli Cabinet Minister declared an all-front war on Hamas — rapid-fire incidents that threatened to bury U.S.-led Mideast peace efforts.

Hamas stepped up its rocket barrages at southern Israel for a second day, retaliating for an Israeli strike that killed seven of its police officers. More than a dozen rockets rained down, one exploding at Kibbutz Beeri, a communal village about four miles from the border fence, wounding two sisters, ages 12 and 2, as they played in their yard, police said. They were not seriously hurt. Their mother was taken to a hospital for treatment of shock.

Hamas also claimed responsibility for a suicide bombing in southern Israel on Monday, its first such attack in Israel in more than three years, unleashing an intensified Israeli air campaign.

After nightfall Wednesday, Israeli aircraft hit a metal workshop in central Gaza, Hamas said. No one was hurt. A few minutes later, aircraft targeted a Hamas car in southern Gaza. There were no reports of injuries. The military confirmed it carried out two airstrikes.

The new upsurge in fighting threatened to overwhelm peacemaking efforts in an avalanche of rocket attacks, reprisals and bombings. A poll released Wednesday showed Hamas gaining a jump in popularity by breaking down the border wall at Egypt Jan. 23, allowing Gaza's quarantined people a 12-day taste of freedom before Egypt closed the breaches on Sunday.

Israel on Wednesday approved construction of a fence along the 150-mile desert border with Egypt, fearing that Palestinian militants who crossed from Gaza into Egypt could infiltrate into Israel.

Israel pledges to build fence
The issue of the mostly unfortified border has arisen several times since the border was established in 1982. Most recently, Israel pledged to build a border fence in early 2007, after a suicide bomber infiltrated from Egypt and killed three Israelis in the southern port of Eilat. It considered the issue again after an upsurge in smuggling and an influx of African refugees.

At first Israel assumed the bomber who hit the southern town of Dimona came in from Egypt, but Hamas identified the bombers as militants from the southern West Bank city of Hebron.

Hamas official Sami Abu Zuhri defended the suicide bombing, which killed a 73-year-old Israeli woman. "There is no choice, no option for our people, but to resist the occupation and defend themselves by all possible means," he said.

Coupled with the suicide bombing and its renewed involvement in rocket attacks, Hamas was showing it could be an effective spoiler in peace efforts.

Peace efforts threatened
Hamas does not recognize a role for a Jewish state in an Islamic Middle East and has sent dozens of suicide bombers to explode inside Israel. The Islamic militants, who rule Gaza after expelling forces loyal to moderate Palestinian President Mahmoud Abbas last June, are not a party to peace talks renewed at a U.S.-sponsored Mideast peace conference in November, where Abbas and Israeli Prime Minister Ehud Olmert pledged to work for a peace treaty this year.

However, Israel insists that Abbas must retake control of Gaza and neutralize militants before any peace accords are implemented. For the meantime, the balance of power is tilting toward Hamas.

While Hamas gains popularity and clout among Palestinians by breaking Israel's stranglehold on Gaza, even temporarily, Abbas' West Bank administration is strikebound — civil servants walked off the job Tuesday in a two-day protest against a new regulation aimed at forcing West Bank Palestinians to pay millions of dollars in back utility bills.

The strike showed that despite the renewal of foreign aid to Abbas' regime, Palestinians under his control are still in serious economic trouble.

So are Palestinians in Gaza, but many are united in blaming Israel for their troubles. Israel, for its part, planned to keep up its economic pressure on Gaza. Last week Israel's Supreme Court cleared the way for reduction in electricity supplies starting Thursday.

"We need to understand there is a war in the south," Vice Premier Haim Ramon told Israel Radio. "The war against Hamas has to be fought on all fronts."

It was unlikely that Abbas could press ahead with serious peace talks with Israel during a high-profile conflict between Israel and Hamas, forcing Abbas to periodically condemn Israeli attacks and measures in the name of Palestinian solidarity.

On Wednesday, Abbas condemned the rocket fire but urged Israel to let supplies in.

"These rockets that are being fired at Israel must stop. It's pointless," he said at a news conference with Austrian Foreign Minister Ursula Plassnik. "At the same time, Israel should not use these rockets as a pretext for collective punishment on Palestinians in Gaza."

In Gaza, the Hamas-dominated legislature canceled Wednesday's session, fearing an Israeli attack. The Israeli military refused to comment.

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

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