Israel warned on Thursday that its forces were prepared to launch a major military operation in the Gaza Strip after a rocket attack that wounded at least 14 people while US President George W. Bush was in Israel.

‘The Israeli army has never been this ready to launch a large-scale operation in Gaza,’ said Infrastructure Minister Benjamin Ben-Eliezer, a member of Israel's security cabinet.

‘It may be that we have no choice but to destroy all the nests of terror. Apparently we'll have no choice,’ he told public radio.

Two small Palestinian militant groups claimed responsibility for Wednesday's rocket attack on a shopping mall in southern Israel, which came as Bush held talks in Jerusalem.

Israel says Hamas bears ultimate responsibility for such attacks because the Islamist movement has been in control of Gaza since ousting forces loyal to Palestinian president Mahmud Abbas in June.

‘We must put an end to Hamas power in Gaza,’ said Deputy Prime Minister Haim Ramon. ‘Under no circumstances should we allow the creation of a Hamastan on Israel's southern border.’

He also spoke out against negotiating a truce with Hamas, an Islamist movement that does not recognise Israel's right to exist.

Israel and Palestinian militants have talked separately to Egyptian mediators about a possible truce, but Hamas rejected Israel's demand that it first free an Israeli soldier captured by the Islamists almost two years ago.

Israel launches frequent military operations in Gaza and imposes a crippling blockade on the impoverished territory in a bid to force militants to halt their almost daily rocket and mortar attacks.