Israel fired shells at the eastern outskirts of Gaza City Tuesday afternoon, killing three Palestinian militants who had earlier launched a barrage of mortars across the nearby border with Israel, reported dpa.
The dead were identified as three militants of the radical Islamic Hamas movement ruling Gaza. Initial reports that a civilian bystander was among the dead proved incorrect. Five other Palestinians were wounded, including four minors, Mo'aweya Hassanein, the chief of emergency services at the Hamas-run Health Ministry, told reporters.
An Israeli military spokesman said Israeli artillery stationed on the border fired twice at groups of militants, who he said had launched at least 20 mortar shells from the area into Israel.
Hamas' armed wing, the al-Qassam Brigades, said in a leaflet that its militants fired 14 mortar shells at the Nahal Oz fuel crossing, on the border with Israel, east of Gaza City.
The mortar attacks, and the Israeli response, came as Israeli Prime Minister Ehud Olmert convened his cabinet for a fateful decision whether to launch a large-scale military operation on Gaza to deal with rocket attacks from the Strip, or alternatively, accept an informal truce.
The final decision however was to be made in a closed meeting held later Tuesday between Olmert, and his defence and foreign ministers, Ehud Barak and Tzipi Livni, and would be brought before Olmert's inner, security cabinet on Wednesday.
During Tuesday's full cabinet meeting, a majority of ministers expressed opposition to a "weak" ceasefire that would allow Hamas to rearm, regain strength and prepare for a new round of fighting, Israeli media reported.
"It is impossible to accept a virtual calm, but if this will be a serious ceasefire, then there's room to talk," Trade and Industry Minister Eli Yishai, of the ultra-Orthodox, hardline Shas party, was quoted as telling the cabinet.
Egypt has been mediating a truce between Israel and Gaza's militant groups, but the truce talks have as yet achieved no results.
Israel has insisted that the truce include provisions to stop Hamas from smuggling weapons into the Strip, and also demands that an Israeli soldier snatched in a June 2006 cross-border raid be released.
But Hamas demands that Israel free Palestinian prisoners in exchange for Corporal Gilad Shalit. A letter from Shalit was transferred to his parents Monday, in which he pleaded for Israel to carry out a prisoner swap with Hamas.
"I am in bad health; I dream of the day when I will return home," Israel Army Radio quoted the letter as saying ... "I hope to return soon and demand that the government not abandon me."
The letter was relayed through the Carter Centre. It was the third sign of life from Shalit, after a letter released in February, and an audio recording last year.