At the al-Shifa hospital, where the wounded were taken, al-Hayya said: "We will go ahead despite the challenges, despite the martyrs, despite the pain that I am suffering and my people are suffering."
 
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Fawzi Barhoum, a Hamas spokesperson, said the attack was a sign that Israel is targeting "everyone - civilians and leaders".
 
Six Palestinians were later wounded by Israeli tank fire on a home in Bait Lahiya in northern Gaza. Three children were among the injured, medical sources said.
 
Earlier on Sunday, Israel threatened to escalate its military action on Gaza.
 
The government said in a statement that its "operations will focus on Hamas and the Islamic Jihad, who are responsible for the current escalation", but officials stopped short of approving a large-scale ground invasion.
 
Ehud Olmert, the Israeli prime minister, said on Sunday: "If the measured steps we are taking, in the political and military sphere, do not bring about the desired calm, we will be forced to intensify our response."
 
His comments came after fighters in Gaza fired at least 10 rockets at southern Israel, some of which landed in the town of Sderot causing damage but no casualties.
 
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In Sderot, though, protesters called on the government to act to stop the attacks.
 
Meanwhile, Avigdor Lieberman, Israel's strategic affairs minister, threatened to pull his party out of the government unless Olmert ordered a large-scale operation against Hamas.
 
"Either Hamas is going to be dismantled, or the government is going to be dismantled," Lieberman said in a statement. "This is not an ultimatum, but these are the options."
 
However, if Lieberman were to quit, Olmert would still have a small majority.
 
Air raids

After sundown on Sunday, Israel fired a shell at northern Gaza, Palestinian security officials said. No casualties were reported.
 
Earlier, Israel killed three people, including at least one Hamas fighter, in an air strike on a car in Gaza City.
 
Fighters in Gaza fired at least 10 rockets 
into southern Israel [AFP] 
According to one witness, the vehicle burst into flames. The Israeli army attributed the fireball to weapons in the car.
 
In another air raid, Israel said it targeted an Islamic Jihad weapons workshop in northern Gaza, but the owner of the building said it was a stereo and video store that was hit.
 
Also on Sunday, Israel moved an undisclosed number of tanks, armoured vehicles and ground forces into areas just inside the Gaza border.
 
"We are assessing the situation every few hours and will definitely decide how to continue our activities," Amir Peretz, Israel's defence minister, said on Sunday, after a meeting of the Israeli security cabinet.
 
Palestinian ceasefire
 
The air raids came as a ceasefire, established late on Saturday between Palestinian factions Hamas and Fatah, took effect after a week of fighting.
 
Hamas and Fatah fighter, who had controlled the streets and taken over apartment buildings in the previous week, dismantled roadblocks and scaled back their presence on the street.
 
Some in Gaza felt that the Israeli military action contributed to the establishment of the ceasefire.
 
"No one would condone fighting one another while the Israelis are shelling Gaza," said Fawzi Barhoum, a Hamas spokesman.
 
More than 50 Palestinians were killed in clashes that broke out after Mahmoud Abbas, the Palestinian president and leader of Fatah, stationed thousands of Fatah security force troops in Gaza City without consulting Hamas, Fatah's partner in the Palestinian unity government.