The army chief urged citizens to be calm, saying he was "sure we will take control of matters", even if this requires military action. "We will do everything that needs to be done," he said.
The US condemned the attack and the ensuing rocket fire, saying that there was "no justification for the targeting of innocent civilians".
"Those responsible for these terrorist attacks should be held accountable," officials from the State Department said in a statement, which added, "We are deeply about concerned about reports that indicate the use of an advanced anti-tank weapon in an attack against civilians, and reiterate that all countries have obligations under relevant UN Security Council resolutions to prevent illicit trafficking in arms and ammunition."
After the attack on the school bus the IDF launched a counterattack in Gaza, killing five people and injuring a number of others, including a child, according to sources in the Strip. Meanwhile, the Iron Dome defense system intercepted its first rocket above the skies of Ashkelon.
"We are still operating in this incident… It is still early to conclude it," Gantz said. When asked whether Israel was headed for a second Operation Cast Lead, he advised civilians "not to be hysterical".
Shaar Hanegev Regional Council canceled school Friday, but schools in Ashkelon and Sderot will hold classes as usual. Council heads met with Defense Minister Ehud Barak late Thursday night in order to remind him that a number of towns within close proximity of the Gaza Strip still lack defense from rocket attacks.
Police brass also held a consultation, and decided to deploy additional officers and rescue services in the south. Minister of Homefront Defense Matan Vilnai also ordered three armored school buses to be allotted to the Shaar Hanegev region.
'He was just visiting grandma'
Barak said the anti-tank missile fire at the bus, which was conveying students home from school, was very serious "because it hit deep within Israel's territory from deep within the Strip".
"This is something we cannot accept. The actions being taken now are a reaction to this incident and they will continue as long as necessary in order to clarify that these things cannot go on," he said.
Barak also commented on the first successful interception by Iron Dome. "It is no secret that we have two active systems, but there is still a long way to go before we can say that we truly have a full solution. The system worked and apparently succeeded and this is a good thing, but it doesn't mean that it will be able to prevent all fire. This is what the IDF is for."
Meanwhile parents of 16-year old Daniel Aryeh Wildfich, who was critically injured in the bus attack, sat by his hospital bed Thursday evening, praying for his wellbeing.
"He was just here visiting his grandmother for a few days, to make her happy, and he went for a ride with the bus driver, who is a friend of the family," his father said. "Who would have thought that this could happen during an innocent visit with grandma."
Wildfich was born in Hong Kong and moved to Israel as a child. In the past decade, the family has been residing in Ramat Beit Shemesh, where Daniel attends the Torat Eliyahu yeshiva.
Rabbi Eliyahu Cohen of Kol Barama Synagogue said two prayers were held for Wildfich's wellbeing, and described him as a "gentle, quiet and well-behaved boy.
"We hope God almighty sends him full recovery. We are all seriously shocked by the incident; it's a small community and everyone knows one another," he said.
Ilana Curiel, Shmulik Hadad, Yitzhak Benhorin, and Tomer Velmer contributed to this report
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