JERUSALEM (Reuters) - Israel said all Palestinian militant leaders were "in its sights" Tuesday and put its security forces on high alert to meet any retaliation for the killing of Hamas leader Ahmed Yassin.
Prime Minister Ariel Sharon (news - web sites) and top aides approved an order to target all senior militants after the wheelchair-bound cleric was assassinated in an Israeli missile strike outside a Gaza mosque Monday, security sources said.
"Everyone is in our sights," Internal Security Minister Tsahi Hanegbi told reporters. "There is no immunity to anyone."
Fearing attacks that Hamas has pledged to avenge Yassin, Israeli forces went on high alert. Previous assassinations triggered waves of suicide bombings on buses and cafes that killed scores of Israelis.
In the Gaza Strip (news - web sites), Palestinian militants fired an anti-tank rocket at an Israeli army position near a Jewish settlement, triggering a gun battle with Israeli forces, witnesses said. There were no immediate reports of casualties.
Israel's army chief hinted that Palestinian President Yasser Arafat (news - web sites) and Lebanese Hizbollah guerrilla leader Sheikh Hassan Nasrallah could end up on the hit list, though security sources said there was no immediate plan to kill either.
"I think that judging by their hysterical responses (to Yassin's assassination) it appears they realize it is getting closer to them," General Moshe Yaalon told reporters.
Hamas, sworn to destroy Israel, said it did not plan to change its strategy by carrying out attacks in other parts of the world. But fears grew that other Arab or Muslim groups might do so in outrage at Yassin's killing.
A statement purporting to come from an al-Qaeda linked group and published on an Islamist Internet site vowed to attack Israel's ally the United States, which unlike many countries did not condemn the assassination. The Abu Hafs al-Masri Brigade claimed responsibility for the Madrid attack on March 11.
GLOBAL FEARS
U.S. stocks and the dollar plunged as news of Yassin's death added to market fears. Sentiment remained fragile Tuesday.
Israel stepped up strikes on militants after suicide bombers killed 10 people at Ashdod port last week. Sharon has ruled out peace talks with the Palestinians until attacks on Israelis stop.
The killing of Yassin appeared to be part of Sharon's bid to smash the most potent Palestinian militant group to prevent it claiming victory if he goes ahead with a planned pullout of 7,500 settlers from Gaza, home to 1.3 million Palestinians.
Under a go-it-alone plan if a U.S.-backed peace "road map" remains stalled amid violence, Sharon has also threatened to draw a "security line" in the West Bank that would leave the Palestinians with less land than they seek for a state.
"Sharon, facing an internal crisis in his government and the rejection of his initiative, wants to prove his political position at the price of Palestinian blood," Khaled Meshal, chief of Hamas's political bureau, told Qatar-based Al Jazeera television.
Some analysts predicted that instead of crushing Hamas, Yassin's death would help recruit a new wave of fundamentalists at the expense of the more moderate Palestinian Authority (news - web sites).
Speaking in Gaza at mourning ceremonies for Yassin, Palestinian Prime Minister Ahmed Qurie called his killing an "ugly crime committed by the government of murderers, the government of Israel."
Thousands of mourners streamed into the main stadium as a booming voice on loudspeakers called for revenge. Shops remained shuttered in Gaza and the West Bank as a mark of respect.
Shouting "revenge, revenge" several thousand Israeli Arabs marched in the town of Nazareth in protest against the killing. Demonstrators held aloft a wheelchair in tribute to the cleric, who had been paralyzed from his youth.
Polls showed about 60 percent of Israelis approved of Yassin's assassination, but over 80 percent thought it would mean more militant attacks.
Many Israelis steered clear of crowded places Tuesday and embassies abroad were told to tighten security. But the head of military intelligence suggested militants could do no more than they were already doing to carry out attacks.