Israel Continues Air Offensive

Israeli aircraft unleashed a barrage of missiles early Wednesday and fired live artillery shells into the Gaza Strip for the first time, pushing forward with an offensive despite a pledge by Islamic militants to halt their recent rocket attacks against Israel.

The Israeli airstrikes knocked out power in Gaza City, plunging virtually all of the city into darkness. The army said it targeted three buildings used for "terror activity" by the ruling Fatah Party, as well as two smaller armed groups, the Popular Front for the Liberation of Palestine and the Popular Resistance Committees.

Palestinian security officials said the buildings suffered substantial damage, but there were no injuries.

The airstrikes came hours after Islamic Jihad militants on Tuesday declared a halt to their recent rocket attacks, and armed Palestinian groups pledged to honor a tattered cease-fire, seeking to end the Israeli offensive.

Tensions were further inflamed when Hamas militants released a video showing a bound and blindfolded Israeli businessman whom they kidnapped and later killed. The kidnapping appeared to signal a new tactic in the militants' fight against Israel.

Israel launched its offensive last weekend in response to rocket fire from Gaza. It has carried out numerous airstrikes in Gaza and arrested hundreds of Palestinians in the West Bank, saying the operation will continue until the rocket attacks stop.

Israel says the strong reaction is necessary to show that new rules are in place following its recent withdrawal from Gaza, after a 38-year occupation, and that attacks from the area won't be tolerated.

Islamic militant and political groups met late Tuesday to discuss the Israeli attacks. After the talks, the leader of Islamic Jihad, Mohammed al-Hindi, said his group cease the rocket attacks. The larger Hamas militant group declared an end to rocket attacks earlier this week.

At Tuesday's meeting, the various Palestinian factions, including Hamas and the ruling Fatah movement, also renewed a commitment to a seven-month-old cease-fire, though they also said they reserve the right to retaliate for perceived Israeli truce violations.

Israeli security officials welcomed the cease-fire declaration but said they wanted to see concrete results before halting the offensive. As the militants were meeting, a rocket landed in the southern Israeli town of Sderot, causing no damage or injuries, the army said. No one claimed responsibility for the attack.

Israeli Defense Minister Shaul Mofaz pledged earlier Tuesday to step up pressure on the militants, saying a ground invasion into Gaza is possible as a last resort. He spoke as he toured an Israeli artillery battery near Gaza.

"This battery ... is not meant to be decoration. It is operational, within range and it will respond against every firing of a Qassam in real time, and that is to deter," he said.

Late Tuesday, the army fired live artillery shells into northern Gaza for the first time in what it said was a response to Palestinian rocket attacks. The shells landed in an open area that the army said was used to fire rockets. No casualties were reported.

Mofaz also threatened Hamas' current leaders with the fate of earlier leaders who were killed in Israeli airstrikes. "If Mahmoud Zahar or Ismail Haniya continue firing rockets, we will send them to the place where (Abdel Aziz) Rantisi and (Sheikh Ahmed) Yassin are," he said.

The renewed fighting has compounded Israeli Prime Minister Ariel Sharon's political problems. The violence had been expected to harm Sharon's chances in a vote Monday in the ruling Likud Party, where hard-liners hoped to punish him for the Gaza withdrawal.

Sharon prevailed with a slim margin. His allies had said that if he lost, he might leave Likud, call early elections and run as head of a new centrist party.

Sharon's political adviser, Lior Horev, said Tuesday that Sharon might still bolt the divided party if it refuses to back his major policies. "Either the party stands behind him, or he has to choose a different way in order to push forward his agenda," Horev said.

Sharon's main rival, Benjamin Netanyahu, said the fight was not over and insisted he would prevail in party primaries next year.

In other violence, Hamas militants released a video showing a bound and blindfolded man they claimed was an Israeli businessman they kidnapped and later killed.

The kidnapping appeared to signal a new tactic for Hamas militants. The group claimed it has formed a special unit to kidnap Israelis in a campaign to secure the release of thousands of Palestinian prisoners.

The video appeared to show Israeli businessman Sasson Nuriel, 51, whose body was discovered Monday in the West Bank. In the video, the man's hands were bound behind his back and his eyes covered by a green Hamas blindfold. Behind him was a green Islamic flag, and on his leg rested what appeared to be his Israeli drivers license.

Nuriel was last seen Wednesday in Jerusalem.

Hamas said in a statement that it kidnapped Nuriel in a plan to trade him for Palestinian prisoners held by Israel. It said it decided to kill him after Israel launched the Gaza offensive and began arresting people in the West Bank.

In the short video, Nuriel said in muffled Arabic, "release the youths from prison." Israeli officials condemned the kidnapping and the video and renewed calls for Abbas to crack down in militant groups.

The new violence started after a blast Friday at a Hamas rally in Gaza's Jebaliya refugee camp killed 21 people, including a 7-year-old boy who died of his wounds Tuesday.

Hamas said Israeli aircraft had fired missiles into the crowd, which Israel denied.

The Palestinian Authority said the blast was caused when Hamas militants mishandled explosives. On Tuesday, the Palestinian Interior Ministry published a forensic report saying that shrapnel found in the bodies of the victims came from Hamas' homemade rockets.