2. The relative quiet has been exploited by Hamas and the other terrorist organizations for the as yet incomplete process of rehabilitating and upgrading their military capabilities. The process is implemented by the vast support provided by Iran and Syria. In any case, Hamas continues to make it possible, sometimes with its own involvement or through its proxies, for low-signature shooting attacks and other terrorist activities to be carried out, and tries to keep a balance between preventing escalation and waging a campaign of attrition against Israeli civilians.

3. Hamas, to enforce its strategic policy of restraint on the other terrorist organizations operating in the Gaza Strip, some of which occasionally try to challenge it, uses its security (and sometimes military) enforcement apparatuses. Hamas also coerced other terrorist organizations into accepting its policies through agreements meant to preserve the lull. Its enforcement apparatuses reduced rocket fire and showcase attacks from the Gaza Strip and at the same time tried to channel the rogue organizations into accepting the ground rules deemed suitable by hamas.

4. Those Hamas policies have been carried out with varying levels of effectiveness and determination. Judging by the results, it can be said that Hamas has generally succeeded in enforcing its policy of restraint on the other organizations, including its rivals. However, at the end of 2010 and the beginning of 2011 there was been an erosion in the willingness of the various organizations to obey Hamas' policy, and there was a certain increase in shooting and other terrorist attacks against Israel.

5. On the ground, in 2009 and 2010 Hamas' restraint policy was effective both quantitatively and qualitatively. The number of showcase attacks decreased and there was significantly less rocket and mortar shell fire from the Gaza Strip. In the two years since Operation Cast Lead, 261 rocket hits were identified in Israeli territory, 158 in 2009 and 103 in 2010. A total of 161 mortar shell hits were identified, 108 in 2009 and 53 in 2010 (half of them in December). In addition, several hundred rockets and mortar shells misfired and landed in the Gaza Strip.

6. To "compensate" for the need to restrain attacks along the Gaza-Israeli border, Hamas and the other terrorist organizations looked for indirect routes into Israel through the Sinai Peninsula and naval routes from the sea. Efforts were made to hide them and on occasion to deny their existence, especially to avoid complicating relations (complex in any case) with Egypt, which regards the exploitation of the Sinai Peninsula for terrorist attacks as detrimental to its national security and economy.

7. The use of indirect routes in 2010 was manifested by two instances of launching of 122mm Grad rockets from the Sinai Peninsula at Eilat, Israel's southernmost city. Responsible for both attacks were operatives from Hamas' Izz al-Din al-Qassam Brigades in the Gaza Strip. Hamas, however, did not admit responsibility for the attacks and in one instance even denied the attack had been carried out. In other instances Hamas and the other terrorist organizations operating in the Gaza Strip sent terrorist squads into Israel through the Sinai Peninsula to carry out various types of attacks. Those plans included the abduction and murder of an IDF soldier, his body to be used as a bargaining chip, and mass-casualty attacks in crowded population centers.

8. The relative quiet was disrupted at the end of 2010 by increasing mortar shell fire aimed at military and civilian targets and by increasing rocket fire. In February 2011 a 122mm Grad rocket attack was carried out against Beersheba, 42 kilometers (26 miles) from the Gaza Strip (for the first time since Operation Cast Lead). There was also an increase in the number of attempted attacks (IEDs, anti-tank fire, sniper attacks) on IDF forces conducting counterterrorism activities near the border fence, both within Israeli territory and inside the Gaza Strip (several hundred meters from the fence).

9. In our assessment, Israel's deterrent power still exists and Hamas clearly wants to continue its policy of restraint to keep the situation from deteriorating. However, Hamas, its military wing and the other terrorist organizations have increased their activities and become bolder. Their objective is to test what they can and cannot do vis-à-vis Israel and extend the limits of their terrorist attacks. Hamas still enforces its enforcement actions, although on occasion it allows the other organizations slightly more freedom of action, and infrequently even participates in attacks near the border fence.

10. Hamas and the other terrorist organizations are exploiting the relative quiet on the ground for a rapid process of rehabilitating and upgrading their military capabilities. Hamas gives the process priority over rehabilitating the civilian infrastructure, which demands greater resources. Hamas and the Palestinian Islamic Jihad particularly emphasize improving their rocket and mortar shell capabilities, considered Israel's home front to be its Achilles heel, and want to be able to strike Israeli civilians while using Palestinian civilians as human shields.

11. In the two years since Operation Cast Lead, Hamas (with aid from Iran) has doubled and upgraded its rocket arsenal. It now has thousands of rockets of various ranges, both standard and homemade, including Fajr 5 rockets which can reach the center of Israel. The Palestinian Islamic Jihad has also upgraded its rocket capabilities.

12. Hamas also particularly emphasizes rehabilitating and upgrading its anti-tank system, which it regards as a response to the IDF's armored advantage. In the past two years the terrorist organizations operating in the Gaza Strip have equipped themselves with advanced anti-tank guided missile systems with deeper penetration capabilities, such as Kornet missiles (the first of which was fired from the Gaza Strip on December 6, 2010).

13. The process of rehabilitating the terrorist military infrastructure is based on weapons and knowhow supplied by external sources. It entails exploiting Sudanese territory and using border-crossing networks of smugglers and merchants, passing through routes, most of which originate in Iran. As in the past, Iran plays a principle role, regarding the growing military capabilities being constructed in the Gaza Strip as a tool for advancing its own strategic objectives.

14. Iranian and Syrian support is manifested in supplying Hamas and the Palestinian Islamic Jihad with highly advanced weapons, logistical aid in smuggling them into the Gaza Strip, instruction and training, transferring funds to the organizations in the Gaza Strip and giving the de facto Hamas administration in the Gaza Strip political and propaganda support. In addition, Iran fosters special relations with the Palestinian Islamic Jihad, an Iranian proxy which is not subject to some of the governmental considerations restraining Hamas.​