"We extracted a high price from them and will continue to do so," Prime Minister Benjamin Netanyahu said at the start of the weekly cabinet meeting on Sunday. "We will act as long as necessary." His comments came as Israeli war planes carried out four air strikes on Gaza on Sunday morning, bringing the death toll in three days of clashes to 18.

Violence between Israel and Gaza militants erupted on Friday afternoon when an Israeli strike killed the leader of the Popular Resistance Committees, sparking a bloody cross-border exchange.

In response, militants fired 124 rockets at Israel, of which 68 were Qassams and 44 were the longer-range Grad variety, a defence ministry statement said.

The Israeli air force has carried out 26 air raids, 15 of which targeted militants who were in the act of firing on Israel. The Iron Dome air defence system set up around the southern cities of Ashdod, Ashkelon and Beersheva intercepted 30 rockets, it said.

Finance Minister Yuval Steinitz said the flareup meant that Israel would soon have to consider sending troops back into Gaza as it did in Operation Cast Lead, a massive 22-day offensive which ended in mid-January 2009, leaving 1,400 Palestinians and 13 Israelis dead.

"Sooner or later, we will probably have to put an end to the Hamas regime, the terror regime, in Gaza," he said at the start of the weekly cabinet meeting. Foreign Minister Avigdor Lieberman justified the initial attack against PRC leader Zuhair al-Qaisi, calling him "a ticking bomb" who was about to attack Israel.

But he said a ground operation was "not desirable," unless it had the clear goal of overthrowing the territory's Hamas rulers. And Environment Minister Gilad Erdan argued that a ground operation would be a dangerous diversion from Israel's current priority -- preventing a nuclear Iran.

"Our defence systems are working well, particularly Iron Dome, and the army has inflicted heavy losses on the terrorists, so for the time being, there is no need for a ground operation," he said. "The Israeli interest is for the world to focus on sanctions on Iran, not on an Israeli military campaign."