By Paul Reynolds BBC News Online World Affairs correspondent

The Israel attack on Hamas military leader Salah Shehada has shown the limits of the Israeli policy of targeting individuals for assassination as well as the determination of the Israelis to pursue their policy of attacking senior Hamas figures.

The casualties were far greater than had been expected and the operation is now reckoned to have been flawed.

In his pursuit of Hamas, the Israeli Prime Minister is ready to accept that some civilians are bound to be killed.

But not so many as there were in Gaza.

The attack also destroys reported plans by Hamas to negotiate a pact on avoiding civilian casualties, though many are sceptical about such plans.

Palestinians called the attack a "war crime" and it has been condemned by the United Nations Secretary General Kofi Annan - who has also condemned Hamas attacks on Israeli civilians.

Parties shall at all times distinguish between the civilian population and combatants

Geneva Conventions

Even the Israeli Interior Minister Eli Yishai says that the method of attack - by an F-16 fighter-bomber on an apartment building - could have been a "mistake".

Israeli said that it was acting in self defence against a man who had targeted civilians. It added later that it regretted the civilian deaths and government ministers said that they would not have ordred the attack if they had known the liely extent of the casualties.

The Palestinian argument is based essentially on a protocol to the Geneva Conventions in 1977 which states: "parties to the conflict shall at all times distinguish between the civilian population and combatants".

Unlike the World War II, in which air forces of both sides deliberately went after the civilian populations, these days such attacks are against international law.

Israeli defence

The Israeli response is that, unlike Hamas, it does not target civilians directly and that, while regrettable, casualties from time to time are inevitable.

Sharon personally approved the attack

This time, the Israelis must have known that women and children would be in a block of flats overnight.

So, at what stage, does going ahead in such circumstances amount to failing to "distinguish between the civilian population and combatants"?

The issue is being closely watched by international organisations.

Hamas, too, has been criticised for its policy of attacking Israeli civilians.

Amnesty International recently condemned these.

"The deliberate killing of Israeli civilians by Palestinian armed groups amounts to crimes against humanity," a report said.

The attack in which Salah Shahada died does appear to represent an escalation of the long standing Israeli policy of directly targeting Hamas leaders, especially figures in the Izzedine al-Qassam brigades, Hamas' military wing.

Sharon hallmarks

And it bore the hallmarks of Ariel Sharon, whose military style as a general was always to hit his enemy in their heartlands.

Shahada has long been one of Israel's most wanted

He has described the killing of Shahada as "one of our biggest successes".

Sharon and the Defence Minister Benjamin Ben Eliezer personally approved the attack, according to Israel Radio.

Israel calculates that Hamas will get progressively weaker and that Israel must absorb whatever revenge Hamas exacts.

In the end, the Israeli government believes, it will prevail because it can bring greater force to bear.

Hamas response

The Gaza attack almost certainly guarantees a Hamas response.

There had been talk this week of some kind of Hamas offer to negotiate a pact to avoid civilian casualties.

The Hamas spiritual leader Sheikh Ahmed Yassin had said that Hamas might study "the suspension of martyrdom operations" if Israel stopped attacks on Palestinian fighters and released prisoners.

A deal, he suggested, could be modelled on one Israel has had with the Lebanese Islamic group Hezbollah to try to avoid civilian casualties.

That will not get anywhere now. It was probably never going to.

It will also probably put an end for the moment to a new approach which was being pushed by Egypt.

This was to reinforce Palestinian security forces by recruiting members of the Palestine Liberation Army, an exile military group whose members are soldiers rather than guerrillas or terrorists.

In this way, it has been suggested, the Palestinian Authority could gradually regain control of the territories from Hamas and the other Islamic organisations.

All such initiatives tend to get swept away in the anger and emotion of continuing violence.