Israeli military: Palestinians have smuggled Katyusha rockets into Gaza

The official, speaking in halting English, initially said several dozen Katyushas have reached Gaza, but later said that he had meant to say "a few."

The official said Israel is prepared to re-enter Gaza in response to the threat of the rockets, which have a longer range and are more powerful than the homemade rockets usually fired by Palestinian militants, but it has no plans to do so in the immediate future. He spoke on condition of anonymity under military guidelines.

Israel withdrew from Gaza last summer, ending a 38-year military occupation.

Since then, militants have managed to smuggle the Katyushas through tunnels along the southern border with Egypt, the official said, adding that some parts have entered Gaza through the Rafah border crossing. The crossing is controlled by Palestinian security forces along with European monitors.

The official said some of the rockets were made by Iran, but gave few other details on their origins.

Islamic Jihad militants, who have close ties with Iran, recently fired a Katyusha into southern Israel for the first time. The rocket caused no damage.

The official said Israel wants to avoid a ground operation in Gaza but will conduct one if the Palestinians increase their capabilities in a "significant way." He cited the Katyushas as a possible reason for military action.

European Union countries this month cut off direct aid to the Hamas-led Palestinian government, reflecting their position that Hamas is a terrorist group.

French President Jacques Chirac called Friday for the creation of a World Bank fund to pay salaries of Palestinian officials whose wages have been stopped by the international aid freeze.

Palestinian leader Mahmoud Abbas said he favoured the idea but noted that Chirac has to discuss it with other governments. The World Bank office in Jerusalem said it had not received any request to create such a fund.

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