ISRAELI military officials are preparing for an offensive against Palestinian militants in Gaza if talks to extend a fragile six-month ceasefire with Hamas fail.
The preparations come after the Syria-based leader of Hamas's political wing, Khaled Meshaal, announced there would be no renewal of the truce after it expires on Friday.
"It appears that the agreement will not be renewed after it reaches its end," Mr Meshaal said in a television interview to mark 21 years since Hamas was founded by the radical Muslim cleric Sheik Ahmed Yassin.
The comments appeared at odds with the Hamas leadership in Gaza, which left open the possibility that a new ceasefire could be negotiated.
At a rally of 200,000 people in Gaza on Sunday, the Hamas Prime Minister, Ismail Haniyeh, delivered a critical assessment of the truce. "The truce came upon national reconciliation under Egyptian sponsorship for six months and expires on December 19, and the enemy was supposed to end the siege and open the crossings and then extend it to the West Bank," he said.
"After all these months, the factions here and abroad held meetings to assess the truce and the assessment was negative regarding the position of the Zionist enemy."
There has been an outbreak of fighting in the past month between Hamas militants and Israel. Hamas has fired around 250 Qassam rockets at Israeli towns and cities near Gaza. At least 20 Palestinians have been killed by Israeli return fire.
But Mahmoud Zahar, a senior Hamas leader in Gaza, said Hamas had not made its position final.
Another spokesman, Osama al-Muzaini, said after Mr Haniyeh's speech that Hamas was still negotiating with Israel.
"The lull will not be renewed as long as there is no genuine Israeli commitment to abide by its terms … [but] if the occupier's position changes, it will be studied," he said.
Israeli officials from the Judge Advocate General's Office will discuss this week the legal and international ramifications of an operation in the Gaza Strip with the Attorney-General, Menachem Mazuz.
Israel's Defence Minister, Ehud Barak, wants an extension to the truce and has sent his top aide, Amos Gilad, to Cairo to explore the possibility with Egyptian officials who brokered the last ceasefire agreement.
Israel is anxious to secure the release of the hostage Gilad Shalit, the Israeli soldier who has been held by Hamas in Gaza for more than 900 days.
In return for his release, Hamas has demanded the release of 1000 prisoners being held in Israel. Last night Israel set free 227 Palestinians.
"Israel wants to see calm prevail in the south," said Mark Regev, a spokesman for the Prime Minister, Ehud Olmert.
