Prime Minister Ehud Olmert's top ministers were meeting as residents of the southern town of Sderot planned a large demonstration in Jerusalem to demand the government stop the rockets. Parents had called a strike of schools after a rocket hit near a day care center on Monday, injuring no one but causing widespread panic as the school year began.
Foreign Minister Tzipi Livni, Defense Minister Ehud Barak and Vice Premier Haim Ramon - an Olmert confidant - all support pinpointed cessations of electricity, water or fuel supplies to Gaza. The impoverished strip is almost totally reliant on Israel for the resources.
At least two other ministers were pressing for military action in the territory.
"The answer has to be military ... I think we need to decide on a few operations against the rocket launchers," Housing Minister Meir Sheetrit told Israel Radio Wednesday. "I don't rule out an incursion ... and taking the area for two or three weeks."
Sheetrit said he opposed cutting off the supply of water, electricity or fuel since he believed that such action would violate international law.
Israel's Defense Ministry declared a state of emergency in Israeli communities near Gaza on Tuesday, a step sometimes taken before a military operation.
The rocket fire has persisted almost daily for six years, abating occasionally with cease-fires declared after military operations or following Israel's withdrawal from Gaza two years ago. Although the rockets only occasionally cause casualties, they spark panic in communities around the Gaza Strip.
The attacks with the crude rockets made in makeshift metal shops in Gaza have perplexed the Israeli military, which has been unable to develop a projectile that can shoot them down since they are in the air for a very short time.
A diplomatic option seemed unlikely since Israel does not speak to Hamas, which has killed hundreds of Israelis in suicide bombings and refuses to renounce violence. Hamas grabbed control of the Gaza Strip in June in bloody fighting with forces affiliated with Palestinian President Mahmoud Abbas' Fatah Party.
The Western-backed Abbas has since fired Hamas from the unity government, leaving Fatah in control in the West Bank and Hamas ruling the Gaza Strip.