REPUBLIKA.CO.ID, GAZA - Hamas stepped up rocket fire at southern Israeli towns and Israel called up reserve troops on Monday in anticipation of a possible escalation of hostilities with the group that dominates the Gaza Strip. The armed wing of the Palestinian group said it fired dozens of rockets within about an hour, after hundreds since mid-June.

Military spokesman Lieutenant Colonel Peter Lerner said the rocket fire at Israel from Gaza by Hamas fighters meant that "now the Israeli military is talking about preparedness for an escalation". It had called up several hundred reservists and was prepared to mobilise a total of 1,500.

Prime Minister Benjamin Netanyahu's security cabinet decided in consultations on Monday to step up air strikes against militants in coastal Gaza, but stopped short of deciding on a ground offensive for now, political sources said.

Netanyahu has pledged "to do whatever is necessary" to restore quiet to southern Israeli communities but cautioned against any rush toward wider confrontation with Hamas, whose arsenal includes long-range rockets that can reach Israel's heartland and its business capital Tel Aviv.

In dissent against Netanyahu's policy, Foreign Minister Avigdor Lieberman dissolved his party's merger with Netanyahu's Likud faction, though still keeping his job.

"A situation in which a terrorist group has hundreds of rockets which it can decide any moment to use is intolerable," Lieberman told a news conference. "There have been suggestions that we wait ... but I don't know what we're waiting for."

The surge in violence has raged since the kidnapping and killing of three Israeli youths last month and a Palestinian teen burnt alive last week. Israel's attack also killed six Hamas members in Gaza.

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