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Smoke and flames are seen following what witnesses said were Israeli air strikes in Rafah in the southern Gaza Strip July 7, 2014.STRINGER/Reuters

Israel and Hamas are on the verge of another all-out war as the two sides opened fire on each other Monday with large barrages of missiles.

Sirens sounded in communities across southern and central Israel and people rushed for cover as rockets rained down from Gaza, as many as 40 in a single hour. Hamas, the militant Islamic group that has controlled Gaza since 2007, claimed responsibility for most of them. Israel quickly struck back with air-launched missiles and the Israel Defence Forces announced it was calling up 1,500 reservists.

Israel's aerial offensive continued into Tuesday morning as part of a campaign named "Operation Protective Edge."

"With this barrage of rockets, Hamas has crossed the red line, and unfortunately it will pay for it," senior Israeli officials said on television.

The dramatic military escalation, stemming from the abduction and killing of three Israeli teens last month and the revenge killing of a Palestinian teen, threatens to engulf the parties in unanticipated conflict and to bring down both the Palestinian unity government and even Israel's governing coalition.

Monday's was the largest exchange of fire since November, 2012, when similar assaults grew into an eight-day conflict that killed 165 Gazans and six Israelis.

The Hamas-led assault came shortly after Israel's security cabinet decided Monday evening to intensify attacks against Hamas and other militant groups in Gaza. A senior official was reported to have said that the ministers wished to refrain from a large-scale military operation for now, but instructed the army to prepare for significant expansion of the operation.

Israeli Prime Minister Benjamin Netanyahu's full cabinet had been sharply divided Sunday with several ministers from right-wing coalition parties denouncing Mr. Netanyahu for what they considered to be his weak response to rocket fire from Gaza over the past two weeks. More than 160 rockets had been fired over that time, with 25 being launched on Sunday alone.

Foreign Minister Avigdor Lieberman went so far as to dissolve the alliance between his Yisrael Beitenu party and the Prime Minister's Likud party, though Mr. Lieberman said he and his ministers will remain part of the coalition government.

For his part, Mr. Netanyahu criticized ministers who, he said, were using current tensions for political gain and inciting anti-Palestinian sentiment.

"In these moments we must be level-headed and responsible," Mr. Netanyahu said, and not use "inflammatory and brash" rhetoric. "We will do everything possible to restore calm in the South," he said.

Israel's Defence Minister Moshe Ya'alon and Chief of Staff Benny Gantz have counselled restraint, no doubt thinking of Hamas's large arsenal that is believed to include many missiles capable of reaching almost all of Israel's major urban centres.

But even Mr. Netanyahu's own party is divided, with the majority of members of parliament believed to be opposed to their leader's approach.

Israeli attacks Sunday night and early Monday struck at several targets in Gaza killing nine people, including six from Hamas.

"The Zionist enemy has opened the gates of hell on itself," said a spokesman for the Popular Resistance Committees in Gaza.

The spiral of violence began June 12 with the abduction of three Israeli teens hitchhiking home at night from their religious boarding school in the occupied West Bank.

Though it appears Israeli authorities knew from the first night that the three were almost certainly dead, they launched a massive military operation against Hamas-linked groups in the West Bank, arresting hundreds and closing scores of offices.

The crackdown led to violent protests in several towns that resulted in the deaths of more than half a dozen young Palestinians.

At that point, groups in Gaza – with Hamas's permission – began to launch a small but growing number of rockets against civilian centres in southern Israel.

Some of those attacks led to retaliatory strikes by the Israeli Air Force.

Last week's discovery of the bodies of the Israeli teens led to a national outpouring of grief and rage; chants of "Death to the Arabs" were heard in several communities the day of their funeral.

Hours later, a 16-year-old Palestinian boy was abducted and brutally killed in retaliation for the Israelis' deaths.

That was when the Arab street in east Jerusalem and in parts of Israel erupted in protest and the rockets from Gaza began coming more frequently.

Initial concern that the street protests could develop into a third intifada appear to have been unwarranted.

"An intifada needs a lot of energy," said Ami Ayalon, a former head of Israel's security police, the Shin Bet. "It requires a broad popular uprising, and I don't see any evidence of that happening," he said.

What Mr. Ayalon said he was more concerned about are other groups, currently small in number, that preach global jihad. They can use the current tension to increase their numbers and launch terror attacks to achieve their goals.

Worse, he said, "they don't have the same constraints Hamas has."

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