KEY POINTS:
SDEROT, Israel - Rockets fired from Gaza killed a 58-year-old woman and wounded several other residents of an Israeli border town today, prompting Israel to warn Palestinian militants they would "pay a heavy price".
It was the first time since July 2005 that rockets had killed Israelis in towns and villages along the Gaza frontier.
One rocket landed in a street not far from the home of Defence Minister Amir Peretz in the working-class town of Sderot, officials said. Peretz was not home at the time. Another rocket landed near the town's police station, paramedics said.
The armed wing of the ruling Hamas Islamist movement said it fired at least two salvoes at Sderot and claimed responsibility for the death, which it said was in response to Israeli shelling last week that killed 19 Palestinian civilians. The Islamic Jihad militant group said it had launched two rockets.
"The Zionist enemy has admitted a Zionist was killed as a result of the Qassam Brigades bombardment of Sderot," the Hamas armed wing said in a statement. A Hamas movement spokesman defended the rocket attack.
Medical officials said a security guard who worked at Peretz's house was seriously wounded while on patrol in the area. The Israeli army said a youth was seriously wounded in the second strike. Several other people were slightly hurt.
Peretz met Israeli security chiefs after the attack, Israeli media said.
"We will act against all those involved in the firing of Qassam rockets, from the heads of the terror organisations down to the last activist. The terror organisations will pay a heavy price," Peretz said in a statement.
Israel's army has carried out repeated raids into Gaza in recent months to try to halt the rocket fire.
The attack on Sderot coincided with a fourth day of talks in Gaza between Hamas and the rival Fatah faction on forming a unity government that Palestinians hope will satisfy Western nations and lead to the lifting of crippling sanctions.
Officials are negotiating cabinet positions after largely agreeing that a US-trained academic from Gaza, Mohammad Shbair, will replace Ismail Haniyeh of Hamas as prime minister.
Hamas said on Tuesday the new administration would not recognise Israel, a stance that could keep Western aid on hold. The West cut direct aid when Hamas, which seeks to destroy Israel, took office in March after trouncing Fatah in elections.
Sderot is a frequent target of Palestinian rocket squads because it lies so close to Gaza -- 5 km (2 miles) away. Rockets also hit a nearby village but wounded no one.
Last week 19 Palestinian civilians were killed in an Israeli artillery barrage on the Gaza Strip town of Beit Hanoun.
Israel said the barrage was aimed at areas militants use to fire rockets but went off course because of a technical failure.
Palestinian militants have fired around 300 makeshift rockets into southern Israel since the start of the year. The missiles rarely hurt anyone but cause widespread panic.
Israel launched a major offensive in Gaza in June after gunmen abducted an Israeli soldier and killed two others in a cross-border raid.
Israel withdrew its army and some 8,500 Jewish settlers from Gaza last year after 38 years of occupation.
- REUTERS
