Hamas is ratcheting up tensions with Israel as a means of deflecting growing calls in the Palestinian street to end its feuding with the Fatah movement and form a national unity government, analysts say. But they warned that the shower of mortar shells and rockets its militants have rained on Israel risks dragging the organization into an unwinnable war.

The tit-for-tat exchange of fire began about a week ago when Israeli jets pounded a Hamas training camp in Gaza in response to a barrage of Qassam rockets fired by militants. The fighting took a turn for the worse on Tuesday when Israel mortar fire killed eight Palestinians, four of them civilians.

Analysts said Israel will limit its response to pinpoint attacks on Hamas targets, but it would have little choice but to consider a large ground assault – a repeat of the 2008-2009 Cast Lead operation – if a Hamas projectile causes large civilian causalities or hits a strategic asset, such as a power plant.

On Wednesday, militants seemed to be ready to risk such a response, firing two Grad-type rockets at residential areas of Be’er Sheva, Israel’s seventh-largest city, injuring one. Another hit Ashdod, a port city and the site of a major power station. Schools were closed in both cities and in other communities surrounding Gaza have been ordered to open shelters for fear of further attacks.

In Jerusalem, one woman was killed and at least two dozen people were injured in a bombing next to a bus near the city’s central bus station. It was the first deadly bombing in Jerusalem since 2004.

“They don’t know what our [Israel’s] threshold is but this is precisely what that they are trying to check,” Ephraim Inbar, director of Bar-Ilan University’s Begin-Sadat Center for Strategic Studies (BESA), told The Media Line. “It’s the first real test of the Netanyahu government’s willingness to fight against Hamas.”

Israel and the Palestinian-ruled Gaza Strip and West Bank have largely been spared the turmoil that has swept across the Middle East over the past three months. But many analysts have warned violence could erupt amid a stalled peace process and the spirit of rebelliousness that has gripped the region.

Nevertheless, most analysts link the upsurge in attacks out of Gaza to local Palestinian politics rather than broader regional currents or disappointment over the peace process. In recent weeks, both the Islamist Hamas and its rival movement, Fatah, have come under heavy popular pressure to put an end to their split, which has left Gaza under Hamas control and the West Bank in the hands of Fatah, and revive their brief national unity government.

Demonstrations calling for unity last week were met with a heavy-handed response from Hamas security personnel. But, in a gesture to popular sentiments, the Hamas Prime Minister Isma’il Haniyya invited Mahmoud 'Abbas, the Fatah leader and president of the Palestinian Authority, to Gaza for unity talks. To Hamas’ chagrin, ‘Abbas accepted.

But with Israel and Hamas now engaged in a daily exchange of fire, Palestinians are no longer thinking about national unity.

“Everyone is talking about a new Israeli war on Gaza and not about internal problems,” Mkhaimar Abusada, who teaches politics at Gaza’s Al-Akzar University, told The Media Line.

In that context, Hamas officials declared on Wednesday a day of mourning, with a collective funeral in Gaza City at midday, for the four civilians and four militants killed by Israeli fire a day earlier. Officials called on residents to join the funeral procession.

Moreover, in a change of policy, Hamas has taken direct responsibility for many of the attacks on Israeli targets, instead of attributing to other, smaller militant groups operating in the Gaza Strip, as it has over the past two years.

Even if they publicly support unity, neither of the two Palestinian movements is particularly interested in national unity, analysts say. Hamas has grown comfortable ruling Gaza, which is seized in bloody coup in 2007, bringing an end to its coalition with Fatah, and fears it would lose elections.

The Fatah-dominated PA would risk losing the substantial foreign aid it receives and its goal of resuming peace talks with Israel. While Fatah backs a negotiated agreement with Israel leading to a Palestinian state, Hamas is sworn to Israel’s destruction. Netanyahu told CNN in an interview last week Israel would not negotiate with a Palestinian unity government.

As of Wednesday, Israel seemed intent on preventing the situation from spiraling into a full-fledged war.

At an emergency session of his cabinet on Wednesday to discuss the escalating tensions, Israel Prime Minister Binyamin Netanyahu sought to discount the possibilities of an escalation. "It could take the form of exchanges of fire, it could continue for a particular length of time,” he said. But his deputy prime minster, Silvan Shalom, said the situation recalled the run-up to the 2008-2009 Cast Lead offensive against Gaza.

"We may have to consider a return to that operation," Shalom told Israel Radio. "I say this despite the fact that I know such a thing would, of course, bring the region to a far more combustible situation.”

The three-week Cast Lead offensive met virtually no resistance from Hamas fighters, but left around 1,400 Palestinians dead and subjected Israel to stinging international criticism for its alleged disproportionate response.

Hamas has sought to build and upgrade its weapons inventory since Cast Lead. Last week, Israel captured a ship in the Mediterranean carrying some 50 tons of arms it suspects were destined for Gaza. Inbar said it was impossible to know what the movement’s military capabilities now were, but Abusada said Hamas was incapable of shifting the balance of power.

“They’re playing with fire,” said Abusada. “Hamas over the last two years has been able to smuggle more weapons even long range missiles that could hit Tel Aviv … But there is no way Hamas can win a war with Israel. Israel is a superpower in the Middle East.”