A Qassam rocket fired from Gaza Wednesday night landed near a factory in Sderot's industrial zone, just hours after President Shimon Peres toured the area. Damage was done to the building, and three people suffered from shock.
Nightshift factory employees were present during the attack.
More than 60 rockets and mortar shells were fired at Israel Wednesday; some 60 Israelis suffered from shock and extensive damage was caused to a number of structures.
During a tour of the Osem food factory in Sderot Peres said, "We must act prudently and not say when and where we will retaliate. The IDF can face any threat."
Due to the escalation, Israel's security establishment has decided to activate an alert system that warns of incoming projectiles in additional towns, including Ashdod, Ofakim Rahat, Hatzerim and Kiryat Malachi.
On Wednesday evening an Israeli air strike in Gaza targeting a group of terrorists apparently preparing to launch mortars left a Hamas gunman dead and wounded four other Palestinians.
Palestinian sources said the strike was carried out by a helicopter, which fired three missiles toward a cell belonging to the Izz al-Din al-Qassam Brigades, Hamas' armed wing.
Most Hamas gunmen in Gaza went into hiding on Wednesday for fear of a harsh Israeli response to the heavy rocket and mortar barrages emanating from the Strip.
It was reported that all exposed Hamas structures, including police stations and government buildings, have been abandoned.
Ali Waked, Hanan Greenberg contributed to the report