At least 125 Qassam rockets have landed in the western Negev in the past five days, the IDF reported.
Prime Minister Ehud Olmert said Sunday, "Our message to the resident of Sderot and the Gaza vicinity communities this morning is one: The Israeli government is with you and will do all it takes to help you."
At the start of the weekly cabinet meeting, Olmert added that "the Hamas terror organization, which is part of the Palestinian government, has once again proven to the world that it is a murderous terror organization. Dozens of Hamas members have already been killed in our operations. They are paying and will pay a very heavy personal price."
"I told the residents of Sderot during my visit there on Thursday, 'You are paying a very heavy price and it is the government's duty to remove the threat. As the threat becomes worse, we will be forced to worsen our steps," the prime minister stressed.
"We as a government are responsible for the wellbeing and safety of the Gaza vicinity residents," Olmert clarified. "In the past five years the government invested about NIS 1 billion in the security reinforcement of the communities. Some NIS 300 million have been invested in the fortification of education institutions."
In light of the criticism over the delay in the fortification and the promise made by billionaire Arcadi Gaydamak to finance all fortification activities, the prime minister stressed that the decision to fortify houses was "the Israeli government's only," and promised to take care of bureaucratic delays.
He promised that the government would recognize the Gaza vicinity communities as confrontation communities, thus granting the residents direct and indirect compensation.
Peretz: Equation has changed dramatically
The defense minister, who toured the IDF's Gaza division, concluded the military activity in the area with satisfaction, saying that "the terror organizations did not expect such a firm, quick and comprehensive response, which combines activities of different kinds.
He clarified that "we plan to change the equation, according to which Hamas will be the one to determine when we will experience a routine situation and when we won't. That equation has already changed dramatically."
Peretz added that the IDF was also operating against the underground tunnels in the Gaza Strip and terror organizations' attempts to carry out terror attacks and kidnap soldiers.
Peretz's decision on a "special situation" is a legal and administrative move which was coordinated with Olmert and was made following a series of consultations and evaluations of the situation.
The special status provides the Home Front Command with different authorities in the rocket-stricken communities, including opening and closing education institutions and calling in workers employed in companies considered vital.
The "special situation" includes the communities of Sderot, Ohad, Tzohar, Sdeh Nitzan, Talmei Eliyahu and other communities in the Gaza vicinity area.
The instruction has already come into force and will last 48 hours, but Peretz is expected to ask the government to extend it.
A similar situation was declared in the north during the Second Lebanon War, while the government refrained from declaring the situation a "war."
The defense establishment seeks to set a "unified procedure" to deal with civilians, in order to prevent a situation in which contradictory orders are being received from different elements – for instance, the Home Front and the army.
The IDF plans to continue its operation in the Gaza Strip in the coming days, focusing on air strikes. According to estimations, rockets will continue to fall in Sderot and the nearby communities.
The political-security cabinet will convene Sunday afternoon to discuss the continuation of the Israeli activity in the Gaza Strip.
Ronny Sofer contributed to the report