FACTBOX: Israel's options on Gaza

(Reuters) - A spike in Israeli-Palestinian fighting along the border of the Gaza Strip on Wednesday raised speculation Israel could step up its military action against militants in the Hamas-controlled territory.

Here are some options that officials say Israeli leaders have considered and the perceived pros and cons for Israel:

ALL-OUT INVASION:

PROS:

-- The best-equipped army in the Middle East, with total control of the air, could overwhelm with relative ease Hamas guerrillas and their allies, who may number around 35,000.

-- It might quieten government critics who demand action to halt daily rocket fire, mainly on the border town of Sderot, and pre-empt Hamas's use of longer-range weapons like Katyushas.

CONS:

-- Despite massive superiority in firepower, taking and holding the urban jungle of Gaza's Palestinian refugee camps would certainly cost Israeli lives, even if lessons have been learned from the 2006 Lebanon war against Hezbollah, when 114 Israeli troops were killed in a month of fighting. Hamas might also kill an Israeli soldier it captured in 2006.

- However angry Israelis are at rockets fired from Gaza, these have killed only three Israelis in the past year. The outcry over the Lebanon war has made Prime Minister Ehud Olmert and his team wary of public reaction to Israeli casualties.

-- Heavy fighting would cause casualties among Gaza's 1.5 million civilians, of whom about half are children. In Lebanon, 900 civilians died compared to 300 Hezbollah fighters. Israel risks condemnation abroad, and possibly even sanctions.

-- Although Palestinian President Mahmoud Abbas shuns Hamas, a bloodbath in Gaza would put Abbas under huge domestic pressure to break off new, U.S.-sponsored peace negotiations with Israel.

-- Retaking Gaza would leave the problem of whether Israel would resume the occupation it ended in 2005 after 38 years. It has vowed not to. But withdrawing after an invasion might see more hostilities from even more embittered Gazans. There has been talk of foreign peacekeepers, as in Lebanon -- but few nations have much appetite for taking on Gaza's problems.

LIMITED FORCE:

PROS:

-- Some Israeli officials speak of a swift move into parts of the 45-km (30-mile) long strip of coast, notably into the relatively thinly populated "Philadelphi Corridor" in the south that would cut Hamas off from supply tunnels from Egypt and into northern areas from which rockets are hitting Israel.

-- Such a move, officials say, could be accompanied by air strikes and commando operations to kill the Hamas leadership and let Abbas's Fatah loyalists take control of the enclave.