At the same time, Hamas said Friday that "every Israeli has become a target," reported an Israeli newspaper.
The violence is jeopardizing a U.S.-backed plan, launched just last week, that calls for Mideast peace and Palestinian statehood by 2005.
President Bush, on the golf course with his father, declined to answer reporters' questions Friday morning about whether the "road map" peace plan was in trouble, reports CBS News White House Correspondent Mark Knoller.
Israel decided to escalate its war on Hamas after the Islamic militant group last week rejected cease-fire talks, said an Israeli security official, speaking on condition of anonymity.
Hamas leaders, who had not been targeted by Israel in the past 32 months of fighting, are now marked for death, the official said. They are considered "ticking bombs" — and therefore legitimate targets — because they set policy and order attacks on Israelis, the official said.
Avi Pazner, a government spokesman, said "there is no immunity for anybody who either orders or executes terrorist activities."
And military correspondent Alex Fishman wrote in the Yediot Ahronot daily Friday that "from now on, everyone is in the crosshairs all the time," including Yassin.
In a statement faxed to news agencies, Hamas said "the Jerusalem (bus) attack is the beginning of a new series of revenge attacks... in which we will target every Zionist occupying our land. We call on all military cells to act immediately and act like an earthquake."
Raanan Gissin, an adviser to Israeli Prime Minister Ariel Sharon, insisted there was no policy change, but said: "We don't target political leaders, but if those leaders have politics of murder, we go after them."
Israel rejects Hamas' claim that there is a strict separation between the group's political leaders, including Yassin, and the military wing that has killed hundreds of Israelis in bombings.
During the past 32 months of fighting, Israel has killed more than 100 wanted Palestinians in targeted attacks, including many from the Hamas military wing. The group's top political leaders were left alone, possibly because of Israel's fear of a bloody backlash.
However, Israel recently developed a contingency plan for going after the top leaders. The plan was activated last week, after Hamas broke off talks with Palestinian Prime Minister Mahmoud Abbas on halting attacks on Israelis, the security official and Israeli media said.
The first target was Abdel Aziz Rantisi, a Hamas co-founder and spokesman. Rantisi, a 55-year-old pediatrician, escaped an Israeli missile strike Wednesday with minor injuries, while his bodyguard and a bystander were killed.
In response, a Hamas suicide bomber killed 17 people and wounded more than 70 in a Jerusalem bus attack a day later and Hamas threatened more bombings.
Israel, in turn, carried out three more missile strikes that killed five Hamas operatives and commanders, along with 13 bystanders, in Gaza City. About 70 people were wounded in those attacks.
A poll published Friday in the Yediot newspaper showed that 58 percent of Israelis believe the military should temporarily halt the killing of militants to give Abbas a chance to establish his influence in his government.
Thirty percent, however, said the strikes should continue.
The poll surveyed 501 Israelis and has a margin of error of 4.5 percent.
Prime Minister Ariel Sharon said Thursday that Israel must assist Abbas in fighting terrorism "until he grows feathers." That angered of Abbas's aides, who called Sharon "an ignorant farmer who does not understand politics."
Late Thursday, Palestinians shot and killed an Israeli motorist in the West Bank, and Israeli soldiers went in to the West Bank town of Jenin and killed two Islamic Jihad activists. Two more Israeli motorists were wounded Friday in a shooting attack near the town of Ramallah.
Also Friday, the army blew up an apartment belonging to the family of Wednesday's suicide bomber, a 17-year-old high school student from the West Bank city of Hebron. The nearby home of another Palestinian gunman was also destroyed, a measure the military uses to punish families of attackers and to try to deter others from carrying out attacks.
With the "road map" plan leading nowhere, U.S. Secretary of State Colin Powell will meet in Jordan next week with other members of the so-called "Quartet" of Mideast mediators — the European Union, United Nations and Russia.
Powell called on Abbas to work harder to rein in militants. "We want him to use that limited capability as effectively as he can," Powell told The Associated Press in an interview after talking to Sharon and Abbas on the telephone.
In Cairo, Arab League Secretary-General Amr Moussa said U.S. observers must be sent soon. "We all have to stop the violence and the bloodshed or at least freeze the situation for sometime until things are cooled off," Moussa told reporters.
A team of American observers is to arrive next week, part of the road map plan.