Another rocket hit the yard of a house, without causing injury. Palestinian gunners struck Sderot and its environs with more than 30 Qassam rockets on Wednesday alone.
Following a decision by Olmert on Wednesday, the military prepared to take 'harsh' measures in an effort to stem new attacks.
Israel Radio reported Thursday that the Defense Ministry had begun evacuating a number of Sderot residents to a Association for Soldiers' Welfare hostel in the northern town of Givat Olga.
Olmert has opposed evacuating Sderot, Peretz' home town, where one rocket slammed into a house near the defense minister's own on Wednesday. Peretz has proposed that sizable numbers of residents be brought out of the city for a "break" from the rocket attacks, which have continued sporadically for the last five years.
Municipality officials said that many families have already left the city on their own. Schools in the city will be closed Thursday for the second day in a row.
Hundreds of Sderot residents have signed up for a program to receive rooms in Society for Soldier's Welfare hostels in other areas of the country. Sderot city officials and the Defense Ministry have opened an information hotline for Sderot residents interested in leaving the city.
In tandem, tycoon Arkadi Gaydamak has funded rooms for some 600 Sderot residents in a Be'er Sheva hotel.
The disagreement over evacuation came as Palestinian militants continued their rocket barrage on the western Negev on Wednesday, firing some 30 rockets at the area, wounding two people.
During consultations between Olmert, Peretz and senior members of the defense establishment on Wednesday, it was decided to resume the assassinations policy, targeting militants, as well as other, unspecified actions.
"Israel will not be able to continue and show restraint when its citizens are being targeted, and therefore it was decided to respond harshly," Olmert said after the meeting.
"It was decided to authorize the IDF and the defense establishment to carry out a series of actions in order to target those launching Qassam rockets and their leadership, to disrupt their ability to launch rockets and to strike the terrorist infrastructure," a statement said.
A political source in Jerusalem said that Olmert had changed his mind and decided to end the "policy of restraint" following intelligence assessments that Hamas intends to escalate its attacks against Israel.
The intelligence reports, presented during the meeting, suggest that the recent hail of rockets on Sderot were directly linked to the internecine fighting between Hamas and Fatah in the Gaza Strip. They stressed that the bombing would continue and even escalate.
Gaydamak launches evacuation of his own
Russian-born business tycoon Arcadi Gaydamak has added complexity to the debate over evacuating Sderot, by taking hundreds of Sderot residents to the Golden Tulip hotel in Be'er Sheva.
The possibility of evacuating people from Sderot was raised Wednesday by Peretz during a meeting with defense officials called by Olmert to discuss the developments in the Gaza Strip and the constant bombardment of Sderot.
"Gaydamak is evacuating people, and he will take over the whole thing," Peretz said. "He sent buses and we need to consider an evacuation."
Olmert opposed the idea. "I am not willing to evacuate Sderot. These are precisely the sort of scenes that Hamas is waiting for. During the war [in Lebanon], when 200 Katyushas fell every day, we did not evacuate entire towns. I don't need to compete with Gaydamak's buses," Olmert said.
"I'm not talking about an evacuation, but a break," Peretz said.
"A break is fine," Olmert said.
The two were referring to what Gaydamak offered residents of Sderot last summer, when he sent thousands at his expense to Eilat to recuperate from the stress of the bombing.
Wednesday night Peretz authorized in principle a plan for the evacuation of hundreds from Sderot for a few days. The idea is to take the evacuees to facilities of the Association for Soldiers' Welfare all over Israel. Priority in the evacuation would be given to the elderly, the infirm and people with no family members.
Peretz is expected to confirm the authorization on Thursday.
According to an analysis by the Home Front Command carried out under orders from Peretz, there are 2,600 Sderot residents who are eligible due to their status as "needy population."
Nonetheless, by last night only 400 spots were prepared to receive evacuees, and only for a few days.
For his part, Gaydamak is also evaluating the possibility of undertaking the reinforcement of homes in Sderot. In consultation with a construction firm, Gaydamak decided to make a visit to the town Friday to evaluate the extent of the project, first hand.