JERUSALEM - Israel's prime minister threatened "harsh and disproportionate" retaliation after Palestinian fighters fired at least 10 rockets and mortar shells into southern Israel on Sunday, wounding three and raising the risk of fresh violence days ahead of Israeli elections.
Israel hit back late Sunday, bombing the Egypt-Gaza border area where Gaza's Hamas rulers smuggle in weapons through tunnels, Palestinians said. No casualties were reported.
Since an unwritten truce ended Israel's offensive in Gaza two weeks ago, rocket and mortar fire from the Palestinian territory has increased steadily. Israeli retaliation, including brief ground incursions and bombing runs, is also intensifying.
All three candidates to replace Prime Minister Ehud Olmert in the Feb. 10 vote levelled their own threats against Hamas.
A late afternoon mortar barrage on the village of Nahal Oz, next to the Gaza border fence, wounded two soldiers and a civilian, the military and rescue services said. Earlier, a rocket landed near a kindergarten near Gaza, police spokesman Micky Rosenfeld said.
Even before the mortars hit Nahal Oz, Olmert told his cabinet that "if there is shooting at residents of the south, there will be an Israeli response that will be harsh and disproportionate by its nature."
Hamas spokesman Taher Nunu said Olmert's threat was an attempt by Israel to "find false pretexts to increase its aggression against the people" of Gaza.
Hamas has not taken responsibility for the new attacks, which have been claimed by smaller Palestinian groups. But Israel says it holds Hamas, which has ruled Gaza since seizing power from a rival Palestinian group in June 2007, responsible for all attacks coming from there.
Israeli defence officials said they had not yet formulated a response to the strikes, but said a return to the offensive -- in which Israeli tanks and infantry units penetrated deep into Gaza -- was unlikely. Instead, they said Israel would consider air strikes, including attempts to kill Hamas leaders.
Late Sunday, Palestinians said Israeli aircraft hit an empty police station in central Gaza. No one was hurt.
The three-week Israeli offensive killed nearly 1,300 Palestinians, more than half of them civilians. Thirteen Israelis also died.
Olmert is in the last weeks of his term. He resigned in September over a string of corruption investigations. Foreign Minister Tzipi Livni, his Kadima party's chosen successor, failed to put together an alternative government, forcing the upcoming election.
Two candidates for prime minister -- Defence Minister Ehud Barak and Livni -- are in the government, competing for credit for last month's bruising Gaza offensive. The third, front-runner Benjamin Netanyahu of the hawkish Likud party, is sniping from the side.
Pre-election polls show Netanyahu with a lead over Livni, and Barak trailing badly.
Both Israel and Hamas have been talking to Egyptian mediators about a long-term truce. Israel wants an end to arms smuggling into Gaza from Egypt. Hamas wants Israel and Egypt to reopen Gaza's borders, which have been virtually sealed since Hamas seized power.
Responding to Israel's concerns, U.S. army engineers arrived at the Gaza-Egypt frontier Sunday to set up ground-penetrating radar to detect smuggling tunnels, an Egyptian security official said.
Inside the Rafah terminal -- the gateway between Egypt and Gaza -- four army trucks loaded with wooden crates and drills could be seen accompanied by four U.S. army engineers.
In Cairo, Palestinian President Mahmoud Abbas told reporters he will not hold reconciliation talks with Hamas as long as the group rejects his authority. The two sides have been divided ever since Hamas seized Gaza. Abbas' Fatah rules the West Bank.
