* Israel bombs Gaza launch sites after rocket attack
* Hamas says Israel nabs two of its West Bank politicians (Adds West Bank arrests)
By Dan Williams
JERUSALEM, Oct 28 (Reuters) - Palestinians in the Gaza Strip fired two rockets at a southern Israeli coastal city on Monday and Israel's Iron Dome interceptor shot down one while the other fell into the sea, a military spokeswoman said.
Within hours, Israel's air force bombed what a military spokesman described as two concealed rocket launchers in northern Gaza. There were no casualties.
The pre-dawn salvo against Ashkelon, about 12 km (7 miles) north of Gaza, was unusual given the relative restraint of Palestinian militants since last November's war between the coastal enclave's Islamist Hamas rulers and the Jewish state.
There was no claim of responsibility for Monday's launches.
They may have been meant to spoil the U.S.-sponsored peace talks that Hamas's rival, Palestinian President Mahmoud Abbas, resumed with Israel in July. To bolster Abbas, Israel is due to free 26 Palestinian prisoners this week. [ID: nL5N0IH0PG]
During the previous prisoner release, in August, Gaza militants fired rockets across the border and Israel responded with air strikes.
Hamas has called on Abbas, who holds sway in the Israeli-occupied West Bank, to abandon peacemaking and form a new Palestinian power-sharing government.
The Islamist faction has also signalled readiness to go to war, taking responsibility last week for a tunnel which the Israelis discovered running into their territory from Gaza and said was likely intended for kidnapping soldiers or setting off underground explosives.
But the sands are shifting for Hamas, which has tipped into financial and political crisis after being cut off from neighbouring Egypt by the new, military-guided interim government in Cairo.
Hamas's ties with former backers Iran and Syria have similarly deteriorated and in Gaza its authority has at times been challenged by more radical armed Islamists.
Abbas's administration, which was expelled from Gaza in a 2007 Palestinian civil war, has kept Hamas in check in the West Bank. So has Israel, whose troops seized two Hamas lawmakers and 23 other Palestinians in the West Bank on Monday, according to Abbas's administration. Israeli authorities did not immediately comment on the arrests.
The Israeli military spokeswoman said a mortar bomb was fired across the border from Gaza on Sunday, but caused no damage or casualties. (Additional reporting by Nidal al-Mughrabi in Gaza and Ali Sawafta in Ramallah, Writing by Dan Williams, Editing by Jeffrey Heller and Gareth Jones)
Earlier on HuffPost:
Produced by Israeli-based Rafael Advanced Defense Systems, Iron Dome is meant to shoot down rockets and artillery shells with ranges of up to 70 kilometers, or 45 miles. It has been operational since 2011. <em>Caption: The Israeli military launch a missile from the Iron Dome defence missile system, designed to intercept and destroy incoming short-range rockets and artillery shells, in the southern Israeli city of Ashdod following the firing of rockets from the Gaza Strip on November 16, 2012. (DAVID BUIMOVITCH/AFP/Getty Images)</em>
How it works: The system detects launches of rockets and quickly determines their flight path. If it is headed toward populated areas or sensitive targets, it fires an interceptor with a special warhead that strikes the incoming rocket within seconds. Rockets headed toward open areas are allowed to land. <em>Caption: Israeli soldiers stand guard by the Iron Dome defense system launch site on November 17, 2012 in Tel Aviv, Israel. (Photo by Uriel Sinai/Getty Images)</em>
Currently, five Iron Dome batteries are deployed in Israel. Most are located in the south near Gaza. A fifth battery was deployed outside Tel Aviv on Saturday, two months ahead of schedule. Hours later, it shot down a rocket headed toward Tel Aviv. <em>Caption: The trail of an Israeli missile launched from the Iron Dome air defence system, designed to intercept and destroy incoming short-range rockets and artillery shells, is pictured from the southern Israeli-Gaza border in response to a rocket launched from the nearby Gaza Strip on November 17, 2012. (JACK GUEZ/AFP/Getty Images)</em>
Missiles cost around $40,000 a piece. In 2010, the U.S. provided $200 million to expand development. Additional funding is currently being considered, with $70 million already allocated for the 2012 fiscal year. <em>Caption: An Israeli Iron Dome missile is launched near the city of Be'er Sheva, southern Israel, to intercept a rocket fired from Gaza Saturday, Nov. 17, 2012. (AP Photo/Ahikam Seri)</em>
The system is part of what Israel calls its "multilayer missile defense". It is meant to protect against the tens of thousands of short-range rockets possessed by militants in the Gaza Strip and Hezbollah guerrillas in Lebanon. Israel has also deployed its "Arrow" missile defense systems for long-range threats from Iran. The military says its new "David's Sling" system, being developed by Rafael to stop medium-range missiles, will be activated by 2014. <em>Caption: An Iron Dome missile is launched in Tel Aviv, to intercept a rocket fired from Gaza, Saturday, Nov. 17, 2012. (AP Photo/Oded Balilty)</em>