Israel fired surface-to-surface missiles at Palestinian security targets in the heart of Gaza City yesterday, in retaliation for the killing of two employees when an explosive device was detonated near where they were working on the border.
The buildings damaged in the missile attack included Gaza police headquarters and the head offices of President Yasser Arafat's Fatah party. The Palestinians reported 20 people injured in the strike, five of them seriously.
An Israeli army source said the attack was in retaliation for the deaths of the workers, both Romanian, who were repairing the border fence around Gaza which has been badly damaged since the intifada erupted last September.
The Israeli army made several more forays into Palestinian controlled territory in Gaza yesterday, destroying a police position at the southern end of the strip in one operation.
The Israeli Prime Minister, Mr Ariel Sharon, said the missile strike was part of a military campaign that would continue until terror ceased. A senior aide to Mr Arafat warned: "This escalation will destabilise the entire region."
Romanians make up a large part of Israel's immigrant labour force. In 1994, when Palestinian suicide bombers began blowing themselves up in Israeli cities, the then prime minister, Mr Yitzhak Rabin, barred many of the 120,000 Palestinians who worked in Israel from reaching their jobs.
Searching for a new source of cheap labour which would not pose a security threat, the government began bringing in workers from Eastern Europe, Turkey, Thailand and Latin America. Since then, tens of thousands of foreign labourers - many without work permits - have entered Israel and begun to sink permanent roots.
Before the bombing yesterday, moderate Israeli politicians met Mr Arafat in Gaza to discuss various ceasefire initiatives. The Palestinian leader told them he was ready to accept two proposals now on the table, both of which call for a freeze on Jewish settlement construction in the territories.
Mr Sharon has rejected all such calls.