Israeli Internal Security Minister Avi Dichter warned at Sunday's cabinet meeting that the number of Israelis threatened by Palestinian rocket crews operating out of the Gaza Strip will soon increase from 25,000 to 250,000.

Dichter noted that Hamas and allied terror groups based in Gaza are making significant advances in their rocket-making abilities, thanks largely to Iranian and Hizballah assistance, and are also importing an increasing number of longer range missiles through Gaza's porous border with Egypt.

Improvements on Hamas' homegrown Kassam rockets and a growing arsenal of Katyusha missiles will soon put all of the coastal city of Ashkelon and neighboring communities within range of daily artillery attacks from Gaza, said Dichter, who urged the government to accelerate fortification plans.

One rocket slammed into the southern Israel town of Sderot late Sunday evening, causing damage to a local factory. A factory employee was treated for shock following the attack.

Dichter has been among Israeli security officials pressing for a more severe military response to the ongoing Palestinian rocket attacks, including a possible full-scale ground invasion of Gaza.

Fearing that a major Israeli incursion may be just around the corner, the London-based Arabic newspaper Al-Quds al-Arabi reported on Saturday that Hamas and Islamic Jihad are considering a cessation of rocket and mortar attacks on southern Israel in return for assurances that Israel will not invade.

Hamas leaders are concerned that the destruction of the army it has been building in Gaza would result in the group losing control of the territory in a counter-coup by forces loyal to Palestinian leader Mahmoud Abbas.