(Updates death toll, adds details)

GAZA, May 20 (Reuters) - Israel launched an air strike on the home of a senior politician of the Islamist group Hamas in Gaza City on Sunday, killing at least six Palestinians, medics and a Hamas source said.

The Israeli military confirmed there had been an air strike in northern Gaza but had no further comment.

The Hamas source said Khalil al-Hayya, a senior figure in the movement, was not there at the time and was safe, but family members were feared to be among those killed.

The strike came shortly after Israeli Prime Minister Ehud Olmert said his security cabinet had authorised an escalation in attacks against Palestinian militants responsible for firing rockets at Israeli towns.

Israel's Army Radio described Hayya as a senior member of Hamas's military wing which manufactures and fires makeshift "Qassam" rockets at Israel.

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