In the wake of Wednesday's Palestinian missile attack on an Israeli shopping mall, officials in Jerusalem cited by Israel's Ynet news portal warned that the Palestinians now have the choice to accept a ceasefire on Israel's terms, or face a major Israeli military operation.

Visiting the Ashkelon shopping mall where some 90 Israelis were wounded when an Iranian-supplied Katyusha missile slammed through the roof, Defense Minister Ehud Barak warned that Israel has the means to quickly eliminate the growing threat.

Speaking at a gathering of world leaders in Jerusalem, Prime Minister Ehud Olmert called the attack "entirely intolerable and unacceptable" and said his government is taking steps to end the rocket fire, but hoped it would not have to resort to unleashing Israel's full military might.

Egypt has been trying to broker a ceasefire between Israel and the Hamas-ruled Gaza Strip for months. The Olmert government has gradually warmed to the idea, but Hamas has shot down every one of Israel's conditions.

Israeli officials cited by The Jerusalem Post cautioned that if Olmert softens Israel's position by agreeing to a truce that permits Hamas to continue strengthening itself militarily and does not secure the release of abducted Israeli soldier Gilad Shalit, then the terrorists will have won a major victory.