FACTBOX-Israel's options on Gaza

(Reuters) - A spike in Israeli-Palestinian fighting along the border of the Gaza Strip on Wednesday raised speculation Israel could step up its military action against militants in the Hamas-controlled territory.

Here are some options that officials say Israeli leaders have considered and the perceived pros and cons for Israel:

ALL-OUT INVASION:

PROS:

-- The best-equipped army in the Middle East, with total control of the air, could overwhelm with relative ease Hamas guerrillas and their allies, who may number around 35,000.

-- It might quieten government critics who demand action to halt daily rocket fire, mainly on the border town of Sderot, and pre-empt Hamas's use of longer-range weapons like Katyushas.

CONS:

-- Despite massive superiority in firepower, taking and holding the urban jungle of Gaza's Palestinian refugee camps would certainly cost Israeli lives, even if lessons have been learned from the 2006 Lebanon war against Hezbollah, when 114 Israeli troops were killed in a month of fighting. Hamas might also kill an Israeli soldier it captured in 2006.

- However angry Israelis are at rockets fired from Gaza, these have killed only three Israelis in the past year. The outcry over the Lebanon war has made Prime Minister Ehud Olmert and his team wary of public reaction to Israeli casualties.