A Palestinian rocket landed in a courtyard next to a crowded day care center on Monday, sending panicked mothers scrambling to take their screaming toddlers to safety and bringing warnings of retribution from Israeli leaders.

None of the 15 children at the center was hurt. But frantic parents in Sderot — already furious over the government's failure to protect them and their children from the near-daily rocket fire — pulled their children out of schools on the second day of the academic year. It was unclear when studies would resume.

The army said seven rockets were fired Monday morning at Sderot, a frequently targeted city just a mile from the Gaza Strip. Islamic Jihad, a radical Palestinian militant group that has fired hundreds of rockets into Israel in recent years, claimed responsibility.

Israeli Prime Minister Ehud Olmert said Israel would show no restraint in its efforts to stem the attacks from Gaza.

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"We will not limit ourselves" he told a news conference in Jerusalem, adding that Israel would "do everything to provide better security for the residents [of Sderot]."

The military carries out almost daily ground and air strikes aimed at rocket-launching squads in northern Gaza, but the crude rockets continue to baffle the high-tech military.

The Education Ministry said studies would continue normally. But Batya Katar, head of the Sderot Parents Association, said parents were pulling all 2,500 of the town's students out of school.

"The school year is over. We can't hold on any more," Katar told The Associated Press by telephone, the voices of panicked parents audible in the background.

At one Sderot school, Nahum Bitton arrived to take his children home.

"Of course I'll take them out. Should I leave them in the hands of Hamas?" Bitton told AP Television News.

Sderot, a working-class town of 22,000, has been battered by thousands of the crude projectiles launched in recent years from Gaza. The inaccurate rockets rarely cause serious injuries or damage, but they have killed 12 people in the past seven years, and because of their frequency, wreak panic in the city.

Visiting EU foreign policy chief Javier Solana condemned the attacks on Sderot, adding that on a previous trip to Israel he had been in the town as rockets fell.

"I'd like to show my solidarity with the people of Sderot," he said at a news conference in Jerusalem with Israeli Foreign Minister Tzipi Livni.

"I know what it means, and to see today again the same experience for the people, in particular at a time when kids are in school, I think it's something that I have to condemn," he said.

While some politicians have urged the government to cut off essential supplies of fuel and power to Gaza's 1.4 million residents, others have warned that such actions would bring a diplomatic backlash and be morally indefensible.

Since the Hamas militant group seized control of Gaza in June, Israel has permitted shipments of food and basic supplies into Gaza, but largely halted the imports of raw materials for industry and all exports of Gaza goods.

Gaza's main cargo crossing, Karni, has been closed, and the pedestrian crossing at Erez is open only to a small group of favored permit-holders.

Complete coverage is available in FOXNews.com's Mideast Center.