A 3-year-old boy and a 49-year-old man were killed Monday morning when a crude, Palestinian-made missile slammed into the street in front of a nursery school in this working-class city near the Gaza Strip, according to Israeli medical officials. They were the first fatalities inside Israel from a Qassam rocket after more than 300 launches by Palestinian guerrillas, Israeli authorities said.

"We heard a boom," said Shuli Vaknin, 32, who rushed out of the school building with her toddler son, Eyal. "We saw the child on the ground. We saw a man who was dead. My son was hysterical. Now he says he doesn't want to go to kindergarten."

For nearly four years, Palestinians in the northern Gaza Strip have fashioned the wildly inaccurate Qassam missiles in automotive and metal workshops and lobbed them into nearby Israeli communities. Of the more than 70 fired toward Sderot, most have landed in surrounding agricultural fields, according to the Israel Defense Forces. The rockets fired Monday came from less than two miles away.

"What happened today completely changes the picture," said Eli Moyal, mayor of the city of 24,000 residents, most of whom emigrated from North Africa and republics of the former Soviet Union. "As long as the Qassams were not killing anyone, people thought of it as an 'experience.' . . . Not anymore. Now it is very, very different."

The Islamic Resistance Movement, known as Hamas, asserted responsibility for the volley of five missiles fired at Sderot on Monday morning. Four of the rockets caused no damage, according to Israeli military officials.

Prime Minister Ariel Sharon and his security advisers met Monday in response to the rocket attack and an explosion Sunday night at a military post inside the Gaza Strip that killed one soldier. A government official familiar with the discussions, who spoke on condition of anonymity, said Israel would use "harsher measures than in the past" in Gaza but declined to provide details.

The Qassam missiles are made from four-inch-wide pipes intended for use as water lines in construction projects and farming. Guerrillas slice the pipes into five-foot lengths and pack them with explosives. A spokesman for the Israeli military said the longest range recorded for a Qassam was just over six miles.

The impact of the fatal missile left a pothole the size of a large frying pan in the middle of the asphalt street in front of the Lilach Preschool in a neighborhood of low-rise apartment buildings. Metal shards sliced through the bodies of 3-year-old Afik Zahavi, and his mother, Ruthie, as they walked toward the school at about 8 a.m. Afik died on his way to the hospital, according to Irit Bibi, spokeswoman for the Soroka Hospital in neighboring Beer Sheva. She said the boy's mother was in serious condition.

Another chunk of shrapnel struck Mordechai Yosopov, an unemployed Ukrainian immigrant, in the head as he was walking a sick neighbor's children to school. Yosopov lived a block away in the same low-rise, concrete-block building as his two children and five grandchildren.

"I ran down the street and I saw my father dead with my own eyes," said Albina Braganov, his 24-year-old daughter, who said the family moved to Sderot from Ukraine 11 years ago. After the attack, she sat red-eyed under a large shade tree in front of their apartment building. Half a dozen older female relatives wearing blue-print kerchiefs sat on a bench nearby, some of them wailing loudly.

"We fled Uzbekistan to come here," said Albina Minichnov, 30, a neighbor who stopped to offer condolences. "We send our children to school, and we don't know if they will come back. Now my daughter's afraid to go to school. How can anyone live this life?"

Inside the single-story, sand-colored school, Mirta Sneer, a government psychological counselor, attempted to dispense advice to a circle of distraught parents perched uncomfortably on plywood chairs built for toddlers. The room was draped in white streamers in preparation for a party Tuesday marking the end of the school year.

"You have to make your child understand their friend is dead," Sneer said. "That he's not coming back. Dead is dead. The child has to understand that."

"I can't tell my child," said one mother, barely containing a sob. "I can't even say it to myself."

"You have to tell them. You have to have the strength," Sneer ordered. "They have to hear it from their parents. You have to tell them: Dead is dead."

"There were people lying on the street, a man with his head open," blurted another mother, her voice cracking. "Anyone could see them!"

Teachers herded the children into the school basement minutes after the blast and distracted them with songs and games, Sneer told her agitated audience. The children saw gray smoke, nothing more.

"We need to tell them this is a very rare incident with a Qassam," she continued in even tones. "They usually don't hurt our kids. You need to tell them we have a very strong military, a strong government that is taking care of them."

On the sidewalk outside the eight-foot-high mesh fence surrounding the shady schoolyard, Hanna Melul, 40, balanced her 4-year-old son on her hip and scoffed: "The government can do what? They can't stop them unless we all live underground."

Researcher Hillary Claussen contributed to this report.

Yitzhak Ohayon, the father of Afik Zahavi, 3, sobs over his son's shrouded body during his funeral. Zahavi and a 49-year-old man were the first two fatalities from the oft-launched Palestinian-made Qassam rockets.