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Missile strikes Israeli school bus

An anti-tank missile fired from the Gaza Strip has struck a school bus in southern Israel, wounding two people, one of them critically, and prompting fierce Israeli retaliation that killed five Palestinians.

Israel unleashed airstrikes and tank fire against Hamas targets across the border. It was the heaviest assault on the coastal territory since a broad military offensive two years ago. Besides the dead, more than 30 Palestinians were wounded, said Palestinian health official Adham Abu Salmiya.

He said one of the dead was a 50-year-old civilian who was sitting outside his home when he was struck by tank fire. Three others were militants killed near the southern Gaza town of Rafah. The fifth man was a Hamas policeman.

The sudden outbreak of violence illustrated the fragile situation along the Israel-Gaza border, where small bouts of fighting can quickly escalate into heavy-scale warfare.

After two years of relative calm, tensions have been rising between Israel and Palestinian militants in Gaza over the past few weeks.

In the past month, Israel has intercepted a cargo ship that it said was carrying arms bound for Gaza, jailed an alleged Hamas rocket mastermind believed to have been captured in Ukraine and been accused of carrying out a mysterious airstrike that killed two people in Sudan. Israel has not commented on this week's airstrike, but officials have said they believe Sudan is a transit point for arms bound for Gaza.

Israel's defence minister, Ehud Barak, ordered the army to respond quickly to the attack on the school bus and said he held the Hamas militant group, which rules Gaza, responsible for the violence.

"We will respond until it will become clear that the Hamas fully understand that we cannot accept and we will not accept such events," he said at a military base in southern Israel.

Hamas issued a rare claim of responsibility for the bus attack, saying it was in response to the killing of three of its leaders earlier in the week. Usually, smaller militant factions claim responsibility.

Palestinian officials reported that Israeli tanks and bulldozers were positioned on the Israel-Gaza border and that Hamas leader Ismail Haniyeh was making calls to leaders in Egypt, Turkey and Qatar appealing for their intervention.

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