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JERUSALEM (Reuters) - With fighting in the Gaza Strip entering its fifth day and Palestinian rockets landing deeper into Israel than ever before, travellers who had hoped to visit the holy land are starting to think twice.
A number of hotels in Israel, along with flagship carrier El Al (ELAL.TA), have already seen some cancellations and believe the number will grow if the violence rages into a second week.
"The continued firing on the south ... is expected to exact a heavy price on the tourism industry which is one of the central anchors in the region," said Tourism Minister Stas Misezhnikov said on Sunday.
Israel unleashed an intensive air campaign against the Gaza Strip on Wednesday with the stated intention of stemming Islamist-militant rocket fire out of the coastal enclave.
Since the start of the conflagration, hundreds of missiles have been launched into Israel, with several speeding towards the commercial hub of Tel Aviv, which had previously been out of range from Gazan militants.
Air raid sirens even sounded in Jerusalem on Friday for the first time in decades before a rocket landed nearby, in the occupied West Bank.
Three Israelis were killed by a direct hit on their apartment building in a small southern town on Thursday, but none of the longer-ranged salvoes struck populated areas or caused any injuries. However, the threat alone is taking a toll.
It was still too soon to assess just how badly the tourism industry will be hurt, said the ministry, which has set up its own situation room to mitigate damages. There have already been a few registered cancellations and trips cut short, coming mostly from the region closest to Gaza.
A spokeswoman for Fattal, Israel's biggest hotel chain, said a few bookings have already been cancelled. "We see the start of a trend, but only in a few days will we be able to see where the overall trend is headed," she said, declining to give numbers.
Likewise, Jerusalem's American Colony hotel reported that some clients had pulled out of visits at the last minute.
An El Al spokeswoman said there have been a few cancellations "here and there" though nothing significant, while Delta (DAL.N) and US Airways LCC.N said some families of Israelis called up by the army had decided to stay home.
The slowdown was not limited to Israel . Tourism represents 12 percent of gross domestic product f or the Palestinian Authority and it could bear the brunt of the damage, Israel's Tourism Ministry said. In comparison, tourism accounts for only 2-3 percent of Israel's GDP, the ministry noted.
The Palestinian West Bank city of Bethlehem, where the Church of the Nativity attracts Christian pilgrims from around the world, had lost nearly half its reservations due to the Gaza violence.
"I think that the percentage of the cancellations has reached 40 to 50 percent until the end of November and for the next month," said Elias al Arja, head of the Arab Association for hotels in the city.
The commercial skies and waterways have also been impacted.
Cruise ships meant to arrive in the southern port of Ashdod are not docking in Haifa. And flight patterns for flights to and from Tel Aviv's Ben-Gurion International Airport have been shifted north to free up air space for Israel's air force operating in Gaza, said one official in the aviation industry.
Some foreign airlines have decided to ferry their crews abroad rather than have them pass their overnight stays locally, Israel's Haaretz newspaper said.
Before the start of the Gaza campaign, Israel had been enjoying a record year for tourists, with 2.6 million visitors entering the country in the first nine months of the year -- a new high and seven percent more than the same period last year.
Reporting by Ari Rabinovitch, Tova Cohen and Mustafa Abu Ganeyeh; editing by Crispian Balmer