Hamas threatened to attack Israeli political leaders and said no Israeli should feel safe after helicopter gunships swooped in and fired missiles at a car carrying Hamas strongman Ibrahim Makadmeh, 51, Saturday.
"Israel has just widened the field of battle and widened the number of possible targets," said Mahmoud Zahar, a Hamas political leader and spokesman, after identifying Makadmeh's mangled body.
"We encourage our cells to plan and prepare strikes against the occupiers ... especially Jewish political leaders," the group's military wing said in a statement.
The last time Israeli forces killed a high-ranking Palestinian political figure was August 2001, when Abu Ali Mustafa of the Popular Front for the Liberation of Palestine was slain. His killing led to the assassination of Israeli Tourism Minister Rehavam Zeevi on Oct. 17, and touched off a series of fierce clashes between Palestinians and Israeli troops in the West Bank.
Makadmeh's killing came after Hamas claimed responsibility for an attack Friday on a Jewish settlement that left two dead, and a suicide bus bombing Wednesday that killed 16. One of the passengers injured on the bus died Saturday.
Israel rarely takes responsibility for such killings, but in an unusual statement, Prime Minister Ariel Sharon's adviser, Shoval, called Saturday's operation in Gaza a "success."
Sharon's new hardline government has promised more attacks against militants, and on Saturday the army said it would launch more strikes. It has also promised stepped up strikes against Hamas and its infrastructure and appears to be digging into Gaza, considered a stronghold of Hamas.
Israel seized parts of Gaza in its most significant occupation in 29 months of fighting as embattled leader Yasser Arafat moved closer to sharing power.
The PLO Central Council, meeting in the West Bank town of Ramallah on Saturday, approved Arafat's request to create the post of Palestinian prime minister and cleared the way for the Palestinian legislature to define the job's powers.
The United States and Israel have demanded far-reaching reforms in the Palestinian Authority as a condition for revived peace talks.
"I want the international community to know that the Israeli occupation is the biggest obstacle standing in front of our reform process," Arafat said Saturday.
Arafat has tapped Mahmoud Abbas for the post, a move that could signal that he has given up on the idea of appointing a politically weak prime minister. Abbas has not given an answer yet.
In Washington, State Department press officer Brenda Greenberg said the United States looked forward to working with "an empowered and credible prime minister," but Zalman Shoval, an adviser to Israeli Prime Minister Ariel Sharon, remained skeptical about Abbas' possible power.
"He is a respected person without any doubt, and I don't doubt his good intentions either, but the real question of course is what authority will he have," Shoval said Saturday.
Council members pressed ahead with talks Saturday while anger flared in Gaza, where funerals for Makadmeh and his four bodyguards were held.
Tens of thousands of mourners, some firing assault rifles into the air and shouting 'God is Great!' packed the streets of Gaza City. His body was draped in the green flag of Hamas and carried on the backs of his supporters.
"We have today an important success against the Hamas terrorist organization in the Gaza strip," Shoval said.
Makadmeh, one of Hamas' founders and a leader of the group's military wing, was accused of engineering several attacks that killed 28 Israelis, the last a tank attack that killed four soldiers in Gaza last month that prompted back-to-back raids in Gaza.
Last week, Israeli forces in Gaza captured Mohammed Taha, 65, a co-founder of the Hamas movement, and his son Ayman, linked to the top Hamas bomb maker. Last July, Israeli forces targeted another Hamas military commander, Salah Shehadeh, killing him and 14 others in a bombing.
On Friday, Israeli troops turned abandoned buildings into military posts, digging trenches around towns and seizing a densely populated 4-square-mile area in the north in what the army called an open-ended operation. In the past, soldiers would hold quick in-and-out raids into Gaza towns and neighborhoods that usually lasted hours or days.
Saeb Erekat, a Palestinian Cabinet official, criticized Saturday's air strike in Gaza and said there is no due process in Israel.
"This is more like the mafia than the government," Erekat said.
Separately, Israeli media reported Saturday that Prime Minister Ariel Sharon met CIA Director George Tenet last week as part of US-Israeli coordination ahead of an anticipated U.S. military offensive in Iraq.
The two met in Israel as part of a tour of the region by Tenet to prepare for a strike, Israeli TV and the Haaretz newspaper Web site reported.
Sharon also met several times in the past year with Jordan's King Abdullah II, the last time three months ago, to clarify each leader's position in regards to a U.S. campaign in Iraq, Channel Two TV reported.
The two men also discussed Sharon's plans for relations with the Palestinians in the aftermath of a U.S. war with Iraq. Sharon and Abdullah met in Jordan each time, the TV said.
Sharon's spokesman, Raanan Gissin, would not comment on any of the news reports.
Iraq fired 39 Scud missiles with conventional warheads at Israel during the Gulf War in 1991 but Israel did not respond due to intense pressure by the United States. Israel has been preparing for a possible Iraqi strike in retaliation for a U.S. war, handing out gas masks and telling citizens to stock up on water and canned food.
But Israeli officials say it is highly unlikely that Iraq will attack. Israel is not expected to respond to any conventional attack by Iraq as part of an effort to ensure Arab states support the campaign against Iraq.