A factory in the Israeli town of Sderot, located less than 5 kilometers
from the Gaza Strip, caught fire Tuesday morning after being hit by a
homemade shell fired by Palestinian resistance fighters from inside the
Gaza Strip.  Four workers were treated for shock and nervous
breakdowns, while one, who was hit in the head by shrapnel, was taken
to Beer Sheba hospital.

The Qassam Brigades, the armed wing of the Hamas movement, claimed responsibility for the attack, as well as two other shells which were fired toward the town of Sderot and the settlement of Be'iri Tuesday morning.  Fighters of the same armed wing also announced responsibility for firing three projectiles and two RPGs at a house east of Jabalia, in the northern part of the Gaza Strip, where elements of a special Israeli military unit were entrenched after infiltrating into the area.

At the same time, the Qassam Brigades introduced a proposition to end rocket fire into Israel, if Israel agrees to pull out of Gaza.

Sderot is the only town located within range of the crude 'Qassam' shells made by Palestinian fighters in Gaza, shells which are made of dynamite attached to metal pipes and have no aiming capability.

Israeli military sources, however, seem to believe that the military capacity of Hamas' armed wing is actually on the increase.  A top official was quoted today as saying, "An analysis of the Qassam rockets that lately struck Sderot settlement shows that those missiles became more accurate and capable of carrying bigger explosive warheads".  The official speculated that the shells will become more powerful within the next few months, adding that Hamas' military strength was swiftly growing.

Much of the population of Sderot has vacated the town after a resort-owner in the Dead-Sea town of Eilat (Um Al-Rashrash) announced several days ago that he would provide free vacations to the population of Sderot.

Israeli sources report that "Sderot has become a ghost town" since the free vacations were announced.

The population of Sderot is a mainly working class community made up of immigrants to Israel – mainly from Russia and Ethiopia.