"The army has a wide range of potential responses at its disposal, including a reoccupation of the Gaza Strip," General Gadi Shmani, the head of the operations department, told parliament's foreign affairs and defence committee.

Prime Minister Ariel Sharon meanwhile reiterated before the same committee that Israel would "not retreat under fire" from Gaza, which is to be cleared of all settlers and troops by December 2005 as part of his controversial disengagement plan.

He categorically rejected accusations by extreme right-wing deputies who accused the government of failing to give sufficiently firm orders to put an end to rocket attacks by Palestinian militants.

Such comments are "vile and disgusting", Sharon told MPs at the closed dooor meeting, according to parliamentary sources.

Jewish settlers blocked a road in southern Gaza on Friday in protest at the firing of mortar rounds into their settlements from nearby Palestinian camps.

Settlers' spokesman Eran Sternberg had accused Sharon of "doing nothing to stop the constant firing of mortars, aimed at breaking the morale of the settlers".