Israel said on Sunday it will keep Gaza border crossings closed following rocket fire into southern Israel.
The directive was issued at the end of a security assessment and comes in lieu of a military response to several rocket attacks coming from the Palestinian enclave within the span of a few days.
The punitive sanction is designed to put further strain on Gaza's struggling economy and tighten the screws on its Islamist Hamas rulers to maintain cross-border calm.
Defense Minister Benny Gantz said that "Israel will continue to show civil and economic generosity, only if stability and security are maintained."
Gantz added that the move should serve as a reminder to terrorist groups of the negative impact an escalation would have on the coastal territory's populace as thousands of Gaza laborers working in Israel will see their work permits revoked.
Israel and Egypt have imposed a crippling blockade over Gaza since Hamas took over the territory in 2007. Both countries oppose the Islamist group and cite security reasons for the sanction.
Gazans working in Israel are earning NIS 300-600 (92$-184$) per diem, compared to an average of NIS 60 (18$) within Gaza, if they manage to find a job at all as over half of the enclave's territory is unemployed.
"Israel has the might and means and it will continue to act in any way it sees fit," Gantz said.
The minister stressed that Jerusalem holds Hamas responsible for any rocket fire coming from Gaza, even though Israel's defense establishment estimated the recent attacks were carried out by Islamic Jihad militants.
He also stated that Israel will continue its efforts to put a stop to the on-and-off riots around the al-Aqsa Mosque compound in Jerusalem.
"Ramadan is supposed to be a holiday of prayer and family gatherings," he said. "Unfortunately, some hold stones and Molotov cocktails instead of holy books. Israel acts and will keep acting against them, and at the same time, will allow the freedom of worship."