Israeli army sources said Hamas fired a rocket into an industrial zone in the coastal city of Ashkelon on Thursday without causing casualties.
It is the first time a Hamas rocket lands in a major Israeli city since the Palestinians launched the Intifada against the Jewish state's illegal occupation.
Palestinian security officials in the occupied Gaza Strip said forces rushed to the scene where a Hamas squad had fired the rocket and prevented them from launching more.
Palestinian forces clashed with Hamas members, said an official, adding security officials were searching for the resistance fighters.
The Palestinian Authority has been under intense US and Israeli pressure to dismantle resistance groups. So far, Palestinians leaders have balked, saying it could start a civil war.
Bearing the brunt of Palestinian
Authority bowing to pressure
But in a move indicating the Palestinian leadership may bow to pressure, top Hamas leader Abd al-Aziz Rantissi said that the Authority last week froze resources of Islamic charities and groups in the occupied Gaza Strip.
Rantissi said it was “in response to Zionist and American pressure”.
The groups have no ties to Hamas, spearheading the Intifada, said Rantissi, adding they were charities assisting impoverished Palestinians.
The move came to light after hundreds of destitute Palestinians, living in desperate conditions due to Israeli blanket curfews, tried to pick up monthly support checks distributed by charities from banks in Gaza City.
The bank employees told them they would not receive the money because the accounts had been frozen.
Some media reports said the Authority has frozen as many as 39 bank accounts of nine Islamic charities.
Israeli government spokesman Dore Gold welcomed the move, describing it as a positive development.
Charities affected by PA freeze:
The Islamic Young Women's Association
The Social Care Committee
The Palestinian Student Friends Association
Al-Aqsa Charity Association
The Islamic Charity for Zakat
Al-Nour Charity Association
In the past three years during the Intifada the cash-strapped Authority has increasingly stopped providing welfare services. Islamic ones have filled the voide.
Amir Abu Umarein, director of Al Mujamma Al Islami, said the freezing of funds will serve a blow to the poorest of Palestinians.
His charity supports about 3000 people, including the families of detainees, those injured by Israeli soldiers and orphans.
About 2000 welfare receivers protested on Thursday after learning they would not receive their source of livelihood.
“We are not terrorists. Freezing the bank accounts is a crime,” read one banner.
Protesters marched towards the headquarters of the Palestinian Monetary Authority.
“This step will make me unable to feed my children,” said a mother of 12. “The Palestinian Authority gives me nothing.”