Hamas terrorists developed and fired a Grad rocket, a variant of the Katyusha, which exploded 14 miles into Israel's Lachish region last week, according to military sources quoted by Mideast Newsline news service. The rocket struck Kibbutz Sdot Brior Havil, northeast of the Negev town of Sderot, the furthest penetration of rockets into southern Israel.

The development was reported the day after terrorist organizations said they had proposed a ceasefire in return for an Israeli pullout from the Gaza region and an end to targeting of terrorists.

Egyptian mediators have said that Hamas tentatively agreed to release IDF Corporal Gilad Shalit, who was kidnapped by Hamas terrorists on June 25, as part of an agreement in which Israel would later release prisoners in exchange.

Two Arab terrorist organizations, including the Al Aqsa Martyrs Brigades affiliated with the Fatah party of Palestinian Authority (PA) chairman Mahmoud Abbas, denied that such an offer had been made.

It was also not clear whether Hamas terror Chief Khaled Meshal had approved the deal, or had even been consulted. The three Hamas-affiliated terror organizations who were involved in the attack during which Shalit was captured apparently answer to Meshal, and not to Hamas Chairman and Palestinian Authority Prime Minister Ismail Haniyeh.

Meanwhile, attacks on southern Israeli communities have continued unabated. More than seven Kassam rocket attacks were launched from northern Gaza on Sunday, most landing near or in Sderot. One landed near the industrial zone of the Shaare HaNegev Regional Council. No injuries or damage was reported in any of the attacks.

Officials have expressed concern that Hamas will begin production of the longer-range rocket within the next several weeks.