JERUSALEM --- The Israeli army launched an investigation yesterday into how Tuesday's missile strike against a top Palestinian militant ended with 15 civilians dead, half a city block wiped out and an outpouring of international condemnation.

The probe will focus on Israel's secret intelligence organizations, which government officials said had assured army commanders that only the target, Salah Shehadeh, and an aide were in a three-story apartment building in Gaza City.

It turned out that Shehadeh's wife and 15-year-old daughter also were inside. Army officials told Israeli news media yesterday that it was a mistake to use a 2,000-pound laser-guided bomb in a densely populated neighborhood in the middle of the night.

The strike destroyed the apartment building, killing the four people inside, including Shehadeh, 48, a leader of the military wing of the Islamic Resistance Movement, better known as Hamas.

But the powerful blast also knocked down or damaged many other buildings in the impoverished block, including several tiny shanty dwellings that army officials said did not show up on aerial photographs.

In all, 16 people were killed, including 10 children, and 150 people were injured.

Several members of the Israeli parliament criticized the army and government leaders for failing to notify the security Cabinet of such an important assassination plot, especially when the Israelis and Palestinians were inching toward a tentative cease-fire agreement.

"The main mistake was that we used a weapon that all those who made the decision knew could kill people living nearby," Haim Ramon, chairman of the Foreign Affairs and Defense Committee, told Israel Radio.

"Ultimately, this was the [military's] mistake," he said. "But the [military] does not use an F-16 in the heart of a populated area without the approval of the political echelon. This is not only an issue of morality, but other issues as well."

Israeli Prime Minister Ariel Sharon said yesterday that had he known that other people were in the building at the time the attack order was given, he would have stopped the operation. He said a similar strike against Shehadeh was canceled Sunday as warplanes were circling overhead, to avoid killing one of his daughters.

"Shehadeh was in the cross hairs of an F-16 four times last week," Sharon told his Cabinet.

The timing of the attack on Shehadeh has also been widely criticized. Israeli and Palestinian officials have met recently in an effort to ease the Israeli occupation of seven West Bank cities and restore economic stability to the areas.

Israeli Foreign Minister Shimon Peres had said that the army might withdraw from Bethlehem and Hebron, and possibly Ramallah, if the cities remain quiet and Palestinian police assume responsibility for security.

And Peres had said that he was about to release $45 million - or about 10 percent of the Palestinian tax revenue being held by Israel - to help the Palestinians recover. He has reissued 3,000 work permits for Palestinians who hold jobs in Israel.

Yesterday, Peres said those offers are still in effect, and that his team planned to meet today with international monitors trying to help the Palestinian Authority restructure its police force and institute democratic reforms.

In exchange for the Israeli troop pullback, the Palestinian militant groups Islamic Jihad and the Aqsa Martyrs Brigades had said that they were about to stop most attacks. Hamas said the groups had worked out an agreement with Palestinian security officials to stop suicide bombings.

And Yasser Arafat's Fatah movement, of which the Aqsa Martyrs Brigades are a part, was to have published an announcement in Palestinian and American newspapers yesterday calling for a cease-fire against "innocent men, women and children who are noncombatants."

After the Israeli attack in Gaza, the groups rescinded the offer and announced a stepped-up campaign of revenge.

Still, there were signs that efforts to reach a cease-fire had not been abandoned.

Palestinian officials outlined yesterday a new proposal to restructure their security forces, in which Israeli troops would gradually withdraw and be replaced by international monitors. The officials said that once all Israeli troops are out of West Bank cities, their police would collect all illegal weapons from militant groups.

Efraim Inbar, a security expert at the Begin-Sadat Center for Strategic Studies in Tel Aviv, said the "targeted killing" of Shehadeh would not have been necessary had the Palestinian police done their job and arrested him.

"This action demonstrated that even in a place where Yasser Arafat has control of his security forces, he still doesn't prevent terrorism," Inbar said.

Hamas will try to retaliate, Inbar said, but the loss of Shehadeh "will be a blow to their ability to harm Israel, at least in the near future."

He said Israel's occupation of West Bank cities has gotten many Palestinians to "understand very well that suicide bombings are hurting their own cause."

Reaction to the deadly airstrike in Gaza filled Israeli newscasts and newspapers yesterday, with most criticizing its timing and method, while agreeing that Shehadeh was dangerous and a worthy target. A headline yesterday in the left-leaning newspaper Haaretz read: "From a 'pinpoint' operation to massive casualties."

A group of Israeli reservists refusing to serve in the West Bank and Gaza Strip on the grounds that the assignment is immoral took out a large ad in yesterday's Haaretz asking the F-16 pilot who dropped the bomb: "Are you familiar with the term, 'A patently illegal order?' Will you recognize such an order if you encounter one? Is the death of children and babies justified in your eyes because of their father's acts, with you being the executioner?"

The ad concludes: "Almost without noticing, the state of Israel is turning into a state that does not recoil from any means to achieve its political goals. We hide the faces of our soldiers due to fear of the International Court for War Crimes, just as criminals hide their faces due to fear of the police."

But the right-wing paper Hatzofe called the operation a success, noting the hundreds of Israelis killed in suicide bombings that Israel says Shehadeh planned and orchestrated over the past two years.

"With all the regret for the babies whom no one intended to harm, the alternative would have been the continued killing of Israeli babies, children, young people and elderly people in terror attacks planned by Salah Shehadeh and his people," the newspaper said in an editorial.

"The criticism from Europe and the United Nations is coming from a bunch of hypocrites who do not lift a finger when Jewish blood is spilled like water."