Attacks and counter attacks between Israel and Palestinians are escalating. For the first time since calling off a truce Hamas fighters launched dozens of rockets over the border, landing in the panic-stricken Israeli town of Sderot. One man was said to have been seriously wounded, another sustained light injuries.Hamas militants say they are retaliating for the killings by Israeli forces of seven members of the same family on a Gaza beach on Friday. Hours later Israel unleashed its fire power targeting Hamas for the Sderot assault. An Israeli air strike killed two Palestinian militants in Gaza. A car being driven by Hamas fighters was also hit, but the men inside are believed to have escaped. Israeli Prime Minister Ehud Olmert has expressed regret over the deaths of the Palestinian civilians on Friday – but so far there has been no admission of responsibility. Tension within the Palestinian leadership is also running high. A referendum on a statehood manifesto that implicitly recognises Israel is intensifying a power struggle between the Hamas led government of Ismail Haniyeh and President Mahmoud Abbas. Abbas is being accused of trying to bring down the government.