Israeli Prime Minister Ehud Olmert says Israel will step up its military action against Gaza militants after a Palestinian rocket struck deep inside Israel last week.

Palestinians carry a man, injured during an Israeli army operation, into Al Aqsa hospital in Deir El-Balah, in the southern Gaza Strip, Sunday, 06 Jan. 2008

Mr. Olmert said Sunday that Defense Minister Ehud Barak had ordered security forces to escalate actions against militants in the coastal territory.

The Israeli military said earlier in the day its forces had killed a Palestinian man in the Gaza Strip who was seen in an area where mortars and rockets had earlier been fired into Israel.

On the diplomatic front, an Israeli official says Prime Minister Olmert and Palestinian President Mahmoud Abbas are considering a meeting ahead of U.S. President George Bush's visit this week.

The official spoke on condition of anonymity and said the meeting has not been finalized.

Meanwhile, Israeli Strategic Affairs Minister Avigdor Lieberman said Sunday he will pull his Yisrael Beiteinu party out of Mr. Olmert's coalition government if Israeli and Palestinian negotiating teams begin peace talks.

Lieberman told Israeli radio that if there are any negotiations on key issues and if there are steps taken to remove settlements in the West Bank, his party would no longer be part of the coalition.

Some information for this report provided by AP, AFP and Reuters.