Israeli aircraft targeting Palestinian rocket squads on Wednesday killed a 12-year-old boy, his father and uncle in a bungled attack, while Islamic militants, enraged by the death of their leader's son in an Israeli raid, bombarded Israel with rocket and mortar fire.
While Gaza was heating up, a hawkish party pulled out of Israeli Prime Minister Ehud Olmert's government, weakening his political base but potentially freeing him to make greater concessions to the Palestinians.
Two days of violence in Gaza appeared to be uniting Palestinians against Israel at a time when peace talks have resumed for the first time in seven years. On Tuesday, 19 Palestinians were killed, most of them militants, including a son of Hamas leader Mahmoud Zahar.
The Palestinian civilians killed Wednesday were victims of an Israeli air attack on a pickup east of Gaza City. The Popular Resistance Committees, a Hamas-allied faction, said the apparent target was its chief rocket maker, who was in the area in a similar vehicle at the time.
Maj. Avital Leibovich, an Israeli military spokeswoman, acknowledged that the family's vehicle was "unintentionally hit" and said Israel tries not to harm civilians.
Hamas spokesman Taher Nunu called the strike "a new crime," saying Israel was "killing more and more of our innocent people and our freedom fighters."
Strike kills militants
At nightfall Israel hit another vehicle in southern Gaza, killing two militants, Palestinians said. The Israeli military said it hit a car filled with weapons.
Gaza militants hit back with a barrage of rockets and mortar shells. Hamas said it fired 79. By nightfall, 44 exploded in Israel, according to police spokesman Micky Rosenfeld. No one was seriously hurt.
Visiting the battered Israeli town of Sderot, U.N. envoy Robert Serry called the rocket attacks "random terror" while also criticizing Israel's Gaza raids. He called for a cease-fire.
In West Bank violence, Israeli troops killed a top commander of the Islamic Jihad group in a raid on a village south of Jenin.
Hamas threatens revenge
Hamas threatened revenge for the Palestinian deaths, and Palestinian President Mahmoud Abbas, Israel's partner in peace talks, also denounced what he called the Israeli "massacre" in Gaza.
Government offices were closed across the West Bank on Wednesday, the first day of a three-day mourning period declared by Abbas. Hamas set aside a similar period in Gaza, where it rules. Palestinian flags were lowered to half-staff, verses from the Quran, the Muslim holy book, poured forth from Gaza mosque loudspeakers, and government offices, banks and shops were shuttered.
The conflict overshadowed the spark of optimism that followed resumption of Israeli-Palestinian peace talks and news that this week the two sides began discussing the core issues of the conflict.
That progress led Wednesday to the first crack in Olmert's ruling coalition. Avigdor Lieberman, head of the hawkish Yisrael Beitenu Party, resigned from the government, taking his 11 members of parliament into the opposition.
Lieberman opposes turning over territory to the Palestinians. Without his internal opposition to all compromise, Olmert could be free to move forward more quickly in the peace talks.
Olmert and Abbas have pledged to try for a peace treaty before President Bush leaves office in a year. Olmert is committed to giving up much of the West Bank and parts of Jerusalem for peace, and his other coalition partners largely agree with that policy.
Israeli forces clear two outposts
Also Wednesday, Israeli forces emptied two makeshift settlement outposts in the West Bank, an incremental move against a major obstacle to Israeli-Palestinian peace talks. Five people at the Harchivi outpost fled as police arrived, but some of the 20 protesters at the Shvut Ami outpost had to be carried away.
Both outposts have been cleared in the past, said the anti-settlement watchdog Peace Now, but were later resettled.
Bush told Israel during his visit to get rid of the roughly two dozen outposts it has promised to dismantle.