Dec. 30 (Bloomberg) -- Israel bombed navy installations and other bases of the Islamic Hamas movement in the Gaza Strip as government leaders indicated the conflict aimed at stopping rocket fire on southern Israel may broaden.

Prime Minister Ehud Olmert said “the military operation is in the first of several stages” in a meeting today with President Shimon Peres, according to an e-mailed statement from the president’s office.

Defense Minister Ehud Barak said Israel would use all legal means at its disposal to stop the rockets and his deputy, Matan Vilnai, said Israel was prepared to fight for several weeks.

The 30 Israeli air force sorties overnight leveled the Hamas government compound in Gaza City that housed the foreign, finance, justice and interior ministries as well as a naval base on the beach and the marina, Palestinian officials said.

At least 360 Palestinians have been killed and 1,400 wounded since Israel started its aerial campaign on Dec. 27, according to the Palestinian emergency services office in Gaza City. Three Israeli civilians and one soldier have died in the rocket attacks that Israeli leaders say the offensive is designed to stop after a six-month cease-fire with Hamas expired Dec. 19.

Former Israeli Prime Minister Benjamin Netanyahu said Israel must topple Hamas and appealed for international support of Israel’s military effort to stop Palestinian militants from firing rockets from the Gaza Strip.

‘No Option’

“We have no option other than to remove the Hamas regime from Gaza,” Netanyahu, head of the Likud Party and a candidate for prime minister in Feb. 10 elections, said today during an interview with Bloomberg Television in Jerusalem.

The Israeli leaders’ comments suggested they are seriously considering backing up the air strikes with a land invasion. Channel Two last night showed footage of tanks massed on Israel’s border with Gaza.

“A ground operation was a likely option from the very start, and the destruction of the tunnels between Gaza and Egypt was a key preparation for that in that it limits Hamas’s ability to bring in new weapons,” said Gerald Steinberg, a political scientist at Bar Ilan University outside Tel Aviv.

The Cabinet on Dec. 28 cleared the way for the army to draft as many as 7,000 reserves and the military yesterday declared a swath of Israel just north of Gaza a closed military zone, where movement was restricted. The army said schools in towns within a 20-kilometer (12-mile) radius of Gaza would remain closed until further notice. Classes resume in the rest of the country today after a Hanukkah holiday that began Dec. 23.

‘Ground Forces’

“The signs are there that a ground invasion may be coming because of lessons learned in Lebanon,” said Shmuel Sandler, also from Bar Ilan University. “Israel must show it is not afraid to move in ground forces, which is what we need for deterrence.”

The Israeli government and army were criticized by a state inquiry for their handling of the monthlong battle with the Shiite Muslim Hezbollah in southern Lebanon in 2006. The government acted hastily and the army relied too heavily on air power to stop rocket attacks over the northern border, the inquiry found.

Hamas issued a statement in Gaza City taking responsibility for the rockets. Leaders of Hamas say Israel has no right to exist and condemn Palestinian Authority President Mahmoud Abbas as a stooge for conducting peace talks.

“As long as the air strikes and killing go on, our support will widen because people see Hamas resisting the occupation,” Hamas spokesman Fawzi Barhoum said in a telephone interview in Gaza. “The number of fatalities is high but our people have been brutally killed before and we remain steadfast.”

Coup

The group, which is considered a terrorist organization by the U.S. and the European Union, seized control of Gaza in 2007 after a brief power-sharing arrangement with Abbas of the rival Fatah party, who called the action a coup.

Israel imposed a blockade on the impoverished strip after Hamas took control, periodically lifting restrictions to allow in humanitarian goods. Fifty-eight trucks with food, medicine and other essentials were allowed in to Gaza yesterday along with five ambulances from the West Bank, an army spokesman said, speaking anonymously by regulation.

Ahmed Qureia, the chief Palestinian negotiator under Abbas, announced a break-off of talks in response to Israel’s bombardments.

‘Against Terror’

Israeli Foreign Minister Tzipi Livni, speaking to parliament, called for international support of Israel’s military attack on Hamas. “Israel is fighting, but it is not just Israel’s battle. This is the battle of the free world against terror and we expect support,” she said.

Livni, who heads the ruling Kadima Party, Barak, chairman of the Labor Party, and Netanyahu are campaigning to become Israel’s next prime minister in the Feb. 10 election. Polls have Livni and Netanyahu running neck and neck. Prospects for Barak, now a distant third, may be determined by his success or failure in the Gaza campaign.

To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net; Saud Abu Ramadan in Gaza City through the Tel Aviv newsroomt .

Last Updated: December 30, 2008 06:01 EST