Israel's Attorney-General has forced his government to restore full electricity supplies to the Gaza Strip, leading ministers to threaten large-scale military action to root out militants.

Menachem Mazuz's decision, which came after a petition by 10 human rights groups to the country's Supreme Court, places the administration of Ehud Olmert at loggerheads with his legal system.

The Israeli Government has already faced criticism from Ban Ki-moon, the UN Secretary-General, and the European Union over its fuel-cutting policy, which last weekend saw the supply of diesel cut from a normal level of 350,000 litres a day down to 200,000 litres while petrol was cut from 150,000 litres to 90,000 litres.

The Gaza Strip is autonomously controlled by Hamas, which does not recognise Israel's right to exist, and the Palestinian territory has seen numerous rocket attacks against Israeli civilian communities in the past few months.

Israel's Government, which designated Gaza a "hostile entity", had hoped that restricting fuel would coerce Hamas into stopping militants from committing the attacks. Palestinians in Gaza rely on Israel for all their fuel and more than half of their electricity.

However, in a statement, Mr Mazuz urged the country's defence establishment to develop alternative policies. "Security chiefs must carry out supplementary examinations to take account of the humanitarian obligations before ordering electricity cuts," he said.

The Supreme Court has given the Government until Friday to justify the measures. In the meantime, Mr Olmert was forced to suspend the power shortage.

Israeli ministers responded to the Attorney-General's verdict, however, by indicating that the Government may consider military action against militants instead. Binyamin Ben-Eliezer, Israel’s Infrastructure Minister, told Israel Radio: "What’s the alternative? The alternative is that tomorrow or the next day we’ll be forced to bring three or four divisions and go into Gaza. There’s nothing we haven’t tried."

However, James Hider, Middle East correspondent of The Times, said that Israel would be reluctant to launch a full-scale re-invasion of the territory, from which it pulled out in 2005, because of the possibility of large army and civilian casualties.

"There are a lot of reservations about sending a massive invasion force into Gaza because it would be immensely costly to both sides, especially to the Palestinians because much of the fighting would be in very built-up areas," he said.

In clashes yesterday, an Israeli soldier and Hamas militant were shot dead in southern Gaza during an Israeli military operation.

Israel has mounted several ground operations in recent years to stop rocket fire over the border, but it has always resumed shortly after troops withdraw.

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