"If Hamas decides to escalate, we will put an end to it... We have several actions before putting ground forces in Gaza, including direct threats against Hamas leaders," Ayalon told public radio.
Ayalon, a member of the ultra-nationalist party Yisrael-Beitenu, issued the warning as cross-border tensions between the Hamas-controlled Gaza Strip and Israel hit a new high shattering a two-year truce.
A rocket launched from the Gaza Strip on Sunday struck the southern Israeli city of Askhelon without causing any casualties or damage.
On Saturday, the Ezzedine al-Qassam Brigades, the armed wing of Hamas, fired about 50 mortar shells into Israeli territory after two of its militants were reported killed.
The attack, which wounded two Israelis and caused minor damage, was the fiercest since Israel carried out a 22-day offensive codenamed "Operation Cast Lead" against Gaza rocket fire in December 2008 and January 2009.
Israel pounded Gaza in return Saturday, wounding at least five Palestinians and cutting power supplies.
Israeli Prime Minister Benjamin Netanyahu issued a statement warning the Jewish state will take "all necessary measures to protect its citizens."
The fresh clashes between Hamas and Israel came as the Gaza-ruling Islamist movement and the West Bank-based Palestinian Authority seek to reconcile their differences, bowing to protests demanding an end to the Palestinian divide. (*)
Editor: Kunto Wibisono
Copyright © ANTARA 2011