Eighteen Israeli civilians, including 10 young children, were treated for shock on Thursday morning when a rocket fired by Gaza-based Palestinian terrorists slammed into a schoolyard in the southern town of Sderot.

City officials said a major catastrophe had been narrowly averted, pointing out that the rocket landed just 50 yards from the packed school building.

At least three more rockets and a number of mortar shells were fired at nearby communities on Thursday, but landed in open areas causing no damage or injuries.

Israeli army officials reported that Thursday's attacks brought to 165 the number of rockets and mortar shells Palestinian terrorists operating out of the Gaza Strip have fired into southern Israel this month alone. For those counting, that comes out to an average of eight rockets and mortars per day.

Israel continues to respond to the terrorist artillery fire with pinpoint aerial and ground strikes, and killed four armed terrorists during operations in Gaza on Thursday morning.

But Israeli army intelligence chief General Yuval Halamish said at a conference at Tel Aviv University that Israel's current policy on fighting the Gaza threat is a limited solution, to say the least.

General Halamish described as a "miracle" the fact that so few Israelis have been killed and wounded by the thousands of rockets the Palestinians have fired from Gaza in recent years.