|Israeli army soldiers sit and stand on top of armored vehicles at a staging area near the Jewish settlement of Ganei Tal, in central Gaza Strip|
Mr. Sharon made the announcement at the beginning of the weekly Cabinet meeting in Jerusalem.
He told his ministers he had informed the military chiefs there were no limitations on operations to end the violence from Gaza.
Israeli forces have already massed along the Gaza border.
Officials have been warning of major military action if the Palestinian leadership does not take decisive action against militants.
Hamas militants have launched more than 100 rockets and mortars towards southern Israel and Jewish settlements in Gaza since Thursday night. Last Tuesday, an Islamic Jihad suicide bomber killed five people in the Israeli coastal city of Netanya.
Israeli forces have targeted Islamic Jihad members and launched several missile strikes against Hamas, killing seven militants. A Hamas commander in Gaza was killed Sunday by an Israeli sniper.
Militants began their barrage of fire as Palestinian President Mahmoud Abbas came to Gaza to hold talks. In a televised speech late Saturday, Mr. Abbas appealed to the militants to hold their fire.
Mr. Abbas called on militant factions to keep their word and stick to the truce they agreed to. But, he also said Israeli policy was to blame for the violence and no one can expect a truce to hold with just one side adhering to it.
The president also warned militants that attacks against Palestinian security forces would not be tolerated. That warning comes after clashes between police and militants in Gaza on Friday.
The five-month old truce between Israel and the Palestinians now appears all but shattered at a time when both sides had hoped for calm ahead of Israel's planned withdrawal from Gaza, to begin mid-August.