TEL AVIV, JAN. 23 (WEDNESDAY) -- Jacqueline Harroush, 43, stood in her wrecked living room Tuesday night several doors from where an Iraqi missile had landed and surveyed a gaping hole in an outer wall and a pile of shattered concrete blocks. "Thank God my children are away in the army," she said.

The missile, which carried a warhead of some 400 pounds, fell about 8:30 p.m. (1:30 p.m. EST) in a narrow alley between two three-story apartment buildings, ripping gaping holes in residential structures as far as a block away and shattering the facades of some buildings even more distant.

The Iraqi attack -- causing three deaths and at least 96 injuries, according to Israeli radio -- was the most devastating strike yet against Israel in the first six days of the Persian Gulf War.

The impact dug a deep crater in the alley and collapsed the walls of one building about 30 feet from the point of impact, burying three members of one family under rubble for several hours until rescuers pulled them out, not seriously injured.

Some survivors stood dazed, still in their nightclothes, as rescuers feverishly searched the rubble for dead or injured. The street was littered with glass and shattered plastic awning panels that were blown apart by the explosion two blocks away.

Several hundred feet away from the point of impact, an upholstered chair hung precariously in the top branches of a tall tree. A store across the street from the collapsed building was nearly filled with debris from a caved-in ceiling.

It was not clear early this morning whether Israel planned to retaliate, but government officials have said Israel would consider military action in coordination with the United States in the event Israelis were killed in another missile attack. More than 10 Iraqi missiles struck the country in two previous attacks last Friday and Saturday.

Government sources said Prime Minister Yitzhak Shamir planned to meet with cabinet ministers and senior minitary officials late this morning to discuss Israel's response. Shamir also planned to meet today with Deputy Secretary of State Lawrence S. Eagleburger, who has been in Israel to conduct U.S.-Israeli consultations and who has praised Israel for delaying retaliation for last week's attacks.

A senior Israeli government source said he did not expect Israel to take action immediately. "I think they will want to consult first," the source said. "However, we have pulled surprises before."

A battery of U.S.-manned Patriot air defense missiles deployed in the Tel Aviv area fired two missiles at incoming Iraqi missiles, but a spokesman for the Israeli military command said it was not known if any hit incoming Scuds.

Military officials said the three people who died were elderly and had suffered cardiac arrest. Three of the injured were described as seriously hurt, including a baby reported to be undergoing surgery early this morning. Officials said two people were moderately wounded while 62 were lightly hurt.

One survivor, Estelle Sarfati, 62, who lived in the apartment block immediately adjacent to the alley where the missile fell, said she barely had enough time to run to her gas-resistant, makeshift shelter and put on her gas mask before the building shook from the explosion.

Standing by her shattered apartment building and watching rescue operations as ambulances removed the most seriously injured, Sarfati said: "The stairs were blocked. My husband had to break down the door for us to get out." She said she and her husband then ran to an underground bomb shelter.

Jacqueline Harroush said when she heard the air raid siren, she and her daughter ran out of their ground-floor apartment, intending to go to her sister's nearby home. But she ran back to retrieve five 2-week-old puppies and had just exited her front door for the second time when the blast blew apart one wall of her living room. She was knocked down by the impact and struck by a flying piece of rubble, she said.

In a briefing Tuesday night, army spokesman Col. Raanan Gissin said Israel would not return to the state of civil alert that existed until today, in which most citizens were told to stay home from work. "Life will continue in Israel as normal. Tomorrow people will be going to work," he said.

"There is no change in our overall policy with respect to this conflict," Gissin said. "We will exercise self-restraint, but we will reserve the right to exercise self-defense on behalf of Israel's population, and to decide on the time, place and method in which we will respond."

Gissin announced that NBC television had been suspended from broadcasting from Israel this morning because of what he said was a serious violation of censorship regulations in reporting on the missile attack. The suspension was indefinite, but Yossi Olmert, the director of the Government Press Office, said he was "sure that NBC will find a way to redress the matter" in the near future.

{In New York, NBC's director of foreign news coverage, David Miller, said NBC correspondent Martin Fletcher had "unknowingly" violated Israeli censorship rules Tuesday night by describing the precise area where the missile landed and by disclosing the number of casualties before cleared to do so by Israeli military censors.

{Miller said the Israelis had requested an apology and that Fletcher gave them one in writing. NBC's satellite feed was restored just before 7 p.m. EST (2 a.m. today Israeli time), he said. "Nobody wants to put anybody's life in jeopardy and these things sometimes slip out," Miller said.}

The army had warned during the last two days that more Iraqi missile attacks were expected, and said the two Patriot antimissile batteries rushed to the country Sunday might not provide a complete defense. Military officials said more Patriots were expected to be delivered to Israel in the coming days.

"We are certainly not blaming the American crews," Gissin said Tuesday night of the failure to shoot down the missile that hit Tel Aviv. "The Patriot missile is not fool-proof."

Israeli and U.S. officials said the Patriot batteries had been deployed in the country in an attempt to prevent more Iraqi missile attacks on Israel that could prompt the Shamir government to retaliate against Iraq. U.S. officials fear that Israeli warplanes flying to Iraq may become involved in battles with Jordanian forces, dangerously widening the war between Iraq and the U.S.-led international alliance.

U.S. officials have also been concerned about the effect that Israeli military action could have on the Arab states in the alliance. However, Saudi Arabia, Egypt and Syria have all indicated in recent days that they would tolerate an Israeli reponse provided it was moderated.

The Israeli government's decision to refrain from action so far has won it widespread praise both abroad and at home, with opinion polls showing that more than 90 percent of Israelis back the action. However, sources say Shamir has faced strong opposition to the policy within his government. A block of ministers led by Housing Minister Ariel Sharon, Shamir's chief rival in the Likud party, has strongly pushed for Israeli military action, sources said.

Minutes before the missile hit, Tel Aviv Mayor Shlomo Lahad was hosting a reception at a seaside hotel for Zubin Mehta, director of the Israel Philharmonic Orchestra, and American comedian Jackie Mason.

Mehta, who was holding a gas mask, said, "May Israel never need to put these gas masks on again." At that moment, air raid sirens began to wail, and the guests ran for the hotel shelter.