Zahar said Hamas wanted to protect the Palestinian people

Up to 40 rockets had been fired at Israel, weeks after its military withdrew from the territory.

In response to the rockets, Israel resumed its policy of targeting militant leaders in air strikes.

Authorised by Ariel Sharon to make "unrestricted" strikes, its military launched new missile attacks overnight.

Palestinian witnesses reported attacks across the strip early on Monday:

Helicopters fired two missiles into Gaza City, knocking out power in eastern districts

Missiles slammed into Khan Younis in the south, damaging a building reportedly used by militants from the Popular Front for the Liberation of Palestine faction

A missile landed in an open field near the southern border town of Rafah

A missile hit an area near a road in the north of the strip used by militant rocket squads, the Israeli military said; one woman was said to have been injured by shrapnel.

Ceasefire

Announcing the end to rocket attacks, the Hamas leader in Gaza, Mahmoud Zahar, said the organisation was committed to a ceasefire which militants declared earlier this year.

Israel vowed to wage a sustained campaign against militants

Mr Zahar said that in stopping attacks on Israel, Hamas wanted to protect the Palestinian people from what he called Zionist oppression.

Palestinian leaders and Egyptian mediators had been pressing Hamas to stop.

The BBC's Alan Johnston says Hamas is in danger of being blamed by Palestinians for drawing Israel back into Gaza just two weeks after a withdrawal welcomed with huge relief by the local population.

On Sunday, an Israeli air strike killed two Islamic Jihad militants, including a commander, Mohammed Khalil.

They were the latest fatalities in a long weekend of violence, just a fortnight after Israeli troops withdrew from the Gaza Strip after 38 years.

Palestinian militants launched rockets at Israeli territory around the town of Sderot, injuring five people.

They were responding to the shooting of three Islamic Jihad militants in the West Bank and a blast which killed 15 at a rally in Gaza - an explosion blamed on Israel by Hamas but disowned by the Israelis.

The rocket attacks, in turn, brought a wave of Israeli air strikes.

Leadership woes

Mr Sharon told his cabinet Israel would conduct a "continued action, whose aim is to hurt the terrorists and not to let up".

Both the Palestinian and the Israeli leaders are facing challenges to their leadership.

The Palestinian parliament plans to hold a vote of no-confidence in Prime Minister Ahmed Qurei and his cabinet, although this has now been postponed for a week.

Mr Sharon also faces a party leadership challenge.

His Likud party's central committee is due to vote on Monday whether to back his rival and former prime minister, Binyamin Netanyahu.

Mr Netanyahu opposed Mr Sharon's decision to pull settlers out of Gaza, saying it would encourage Islamic militants to attack Israel.