JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmert on Thursday issued a "last-minute" appeal to Palestinians in the Gaza Strip to reject their Hamas rulers and stop rocket fire at Israel, warning them he would not hesitate to use force.
His comments were the clearest indication yet that Israel was preparing a possible Gaza offensive which could result in heavy casualties on both sides and fuel a humanitarian crisis.
Israeli political sources said Olmert's security cabinet approved a "staged" military escalation, beginning with air strikes against a wider range of Hamas targets in the densely-populated enclave.
A large-scale operation has yet to be authorized but could get a green light depending on Hamas's response, the sources said.
In Gaza, Hamas spokesman Fawzi Barhoum said Israel would "pay the price" for any attack.