Israeli military aircraft fired missiles Saturday at two cars in the northern Gaza Strip, killing two Palestinians and wounding nine others, hours after a barrage of rockets was fired from Gaza into Israel. The Palestinians who died were members of the radical group Hamas, according to leaders of the group in Gaza.

The airstrike marked the first fatal Israeli military operation in Gaza since Israel completed its withdrawal from the strip this month and brought with it the threat of an escalating clash as Israeli tanks, artillery batteries and infantry units gathered along Gaza's northern border throughout the day.

Early Sunday, Israeli troops arrested 206 Palestinians, most of them members of Hamas and Islamic Jihad, on the West Bank, military officials said. Those detained included Hassan Yousef, the West Bank leader of Hamas, and his two sons, who were arrested in their Ramallah home, according to a member of his family.

The arrests and air strikes followed a pre-dawn rocket barrage Saturday from Gaza into southern Israel.

Hamas asserted responsibility later in the day for the pre-dawn rocket attack. Leaders of the group, known formally as the Islamic Resistance Movement, said the attack, which wounded five Israelis, was a response to a massive explosion at a Hamas rally in the Jabalya refugee camp Friday that killed at least 17 Palestinians.

Israeli military officials denied any involvement in the explosion, and Palestinian Authority security forces in Gaza said the blast was likely caused when a cache of homemade rockets exploded accidentally.

"This was an Israeli massacre," Sami Abu Zohri, a Hamas spokesman in Gaza, said of Friday's explosion. "They are continuing their aggression against our people inside this liberated area, so we will keep our right to fight the occupation. We can assure them that as long as the Israeli aggression continues, inside and outside of Gaza, the resistance will continue in those areas as well."

The violence was the deadliest since Israel ended its 38-year presence in the coastal strip, envisioned as part of a future Palestinian state. Palestinian officials said Mahmoud Abbas, the Palestinian Authority's president, met with Hamas officials Saturday and received a promise to stop armed demonstrations in the streets for the next few days. But a senior Israeli military intelligence official said Abbas appeared to be "asleep" at a vulnerable time for his political rival.

"This is a big opportunity for him with Hamas in the corner with egg on its face," the official said. "But he is running away from it."

Saeb Erekat, the Palestinians' chief negotiator, said he hoped the Israeli military would now move back from the Gaza border and cease air operations to give Abbas more room in dealing with Hamas. He also called on President Bush and others in the coordinating group on Mideast peace known as the quartet, which includes the United Nations, Russia and the European Union, "to begin an immediate de-escalation of the situation."

"This is very dangerous and could easily go from bad to worse," Erekat said. "It is not in the Israeli or Palestinian interests for this violence to continue."

In addition to the troops and armor massing along the border, Israeli fighter aircraft bombed open areas near the frontier used frequently by Palestinian fighters to launch rockets, witnesses said.

Prime Minister Ariel Sharon, bracing for a difficult fight for his Likud party's leadership next week, convened his security cabinet Saturday evening. The cabinet decided against sending ground troops into the strip, according to military officials, but approved the use of artillery and airstrikes against targets inside Gaza. The cabinet also decided to keep the West Bank and Gaza Strip closed, meaning that Palestinians with permission to enter Israel will be unable to do so.

Early Sunday, witnesses said, an Israeli fighter plane bombed an empty Hamas-run school in Gaza City and a helicopter gunship struck targets in Khan Younis. No injuries were reported.

The approved military operations could include assassinations of Hamas operatives, military officials said. Israel pledged to end such so-called targeted killings in February when Sharon and Abbas agreed to a temporary cease-fire that radical Palestinian groups, including Hamas, signed onto a month later. Israeli officials have said Hamas has broken the agreement a number of times, most recently by firing rockets into southern Israel.

"Israel now has double the responsibility to protect its people from Gaza attacks," said Gideon Meir, a senior Israeli Foreign Ministry official. "And the Palestinian Authority appears to have no inclination whatsoever of stopping them."

Israel did not respond after Islamic Jihad -- a smaller radical faction that, like Hamas, refuses to recognize Israel's right to exist -- fired several rockets into southern Israel. No one was injured in the attacks, which Islamic Jihad officials said was a response to an Israeli military operation in the West Bank on Friday that killed three of their fighters near Tulkarm.

But Israeli military aircraft struck Saturday after Hamas launched more than 30 rockets toward the Israeli city of Sderot -- first firing on weapons workshops and warehouses, then two trucks carrying Hamas gunmen and weapons traveling along the newly opened Salahuddin Highway, according to Israeli military officials and witnesses at the scene.

For several hours an Israeli drone aircraft dropped leaflets over northern Gaza, accusing Hamas of firing rockets "to cover its responsibility for the killing of Palestinians at the rally in Jabalya."

Special correspondent Islam Abdel Kareem in Gaza City contributed to this report.