JERUSALEM (AP) -- Israel will step up military operations in the Gaza Strip, including a more intensive air campaign and the possible demolition of hundreds of Palestinian homes, Israeli officials said Sunday.
At the first Cabinet meeting since 13 Israeli soldiers were killed in three separate incidents in Gaza last week, Defense Minister Shaul Mofaz and military chief Lt. Gen. Moshe Yaalon pledged to crack down on militant groups, according to officials in the meeting.
Last week's bloodshed in Gaza -- which also included the deaths of 32 Palestinians -- has strengthened calls in Israel for a pullout from the volatile coastal area. Gaza is home to some 7,500 Jewish settlers who live amid 1.3 million Palestinians.
More than 100,000 Israelis gathered in Tel Aviv on Saturday night, calling on Prime Minister Ariel Sharon to implement his plan to withdraw from Gaza and four West Bank settlements and to resume peace talks. It was one of the largest demonstrations by the Israeli "peace camp" in years.
Sharon's hard-line Likud Party -- a tiny fraction of the overall population -- rejected the Gaza pullout plan in a referendum May 2.
Organizers of Saturday night's rally said the demonstration was in response to the Likud vote, noting that a solid majority of the public favors Sharon's plan.
Sharon, suddenly at odds with members of his own party, has pledged to revise the plan.
Officials in his office, speaking on condition of anonymity, said Sunday the rally could help his efforts. They said Sharon plans to ask his Cabinet in two weeks to approve a virtually unchanged "disengagement plan."
The soldiers' deaths in Gaza -- two were shot dead while searching for the remains of their comrades -- have caused a public outcry in Israel.
Mofaz pledged Sunday to step up military activity in Gaza, noting that Israel had carried out a number of airstrikes on militant targets in recent days.
"We started continuous airstrikes. We will deepen the fighting," Mofaz said, according to participants in the meeting.
Israeli helicopters fired missiles at targets in Gaza City early Sunday, knocking out power for about 40,000 people and causing widespread panic. The airstrikes targeted a Hamas office and the office of a group affiliated with Yasser Arafat's Fatah faction. Power was restored hours later.
Mofaz also promised a "different reality" along the Gaza-Egypt border, where seven soldiers were killed last week, to halt arms smuggling through underground tunnels.
Yaalon told the ministers the army had identified hundreds of Palestinian homes along the border for demolition if violence continues, the meeting participants said.
Last week, the army demolished 88 homes, leaving more than 1,000 Palestinians homeless, after Palestinian snipers killed two Israeli soldiers, according to the United Nations. Israel said gunmen had used the homes for cover.
Israel's Supreme Court appeared Sunday to clear the way for more demolitions in the area, rejecting a petition to prevent the razing of 13 houses there. The three judges ruled the army had a "real, imminent need" that justified the demolitions.
The ruling said more homes could be destroyed in the future if they are part of a military operation and gunmen are using the buildings as cover to shoot at soldiers.
Top U.N. and EU officials last week condemned the demolitions. Secretary of State Colin Powell on Sunday also voiced opposition to the practice.
"We know Israel has a right for self-defense, but the kind of actions that they're taking in Rafah with the destruction of Palestinian homes we oppose," Powell said at a gathering in Jordan.
Meanwhile, Sharon said he had asked Egypt for help in halting weapons smuggling across the border into Gaza.
He said he was in talks with Egypt about altering the historic Camp David peace agreement to allow Egypt to increase its military presence in the border area. Egyptian officials declined to comment.
Officials said the Palestinians have been trying to smuggle long-range Katyusha rockets and Strella anti-aircraft missiles into Gaza. Mofaz said the Katyushas -- with a range of about 7 1/2 miles -- would "upset the military balance" in Gaza.
