The fighting between Israel and Palestinians picked up again on Tuesday as Israeli armoured vehicles crossed into southern Gaza.
Israeli officials say they are going after militants in what is being described as a "pinpoint" operation. Three Palestinians have been wounded in clashes between the two sides.
The incursion came as U.S.-backed Palestinian President Mahmoud Abbas suggested he was not ready to rejoin peace talks with Israel after its military attacks in Gaza in recent days, which have included civilian deaths.
"I call on the Israeli government to halt its aggression so the necessary environment can be created to make negotiations succeed, for us and for them, to reach the shores of peace in 2008," Abbas said.
U.S. Secretary of State Condoleezza Rice had met with Palestinian Abbas in an effort to change his position, but came away without the renewed public commitment to peace talks.
Abbas suspended negotiations on Sunday after more than 120 Palestinians in Gaza were killed in a five-day Israeli offensive. According to reports, half of those killed were civilians before ground troops were pulled out of northern Gaza on Monday.
Rice's visit to the Mideast follows days of violence in the Gaza Strip and is designed to restart the peace process.
"We look forward to the resumption of those negotiations as soon as possible," she told a joint news conference with Abbas in Ramallah.
Rice made no mention of having secured an agreement from Abbas to resume talks -- something she had pushed for during the meeting, according to U.S. officials.
Abbas avoided a question about when peace talks with Israel might resume.
Rice said she hasn't given up hope that a deal can be worked out before U.S. President George Bush ends his term in January.
"I still believe that can be done," said Rice.
She is due to meet Israeli Prime Minister Ehud Olmert later Tuesday and hold further talks Wednesday before leaving the region.
Earlier in her visit, Rice recognized Israel's right to defend itself from rocket fire but said the country must avoid civilian casualties.
"The rocket attacks against innocent Israelis in their cities need to stop. This can't go on. No Israeli government can tolerate that," she said. But the Israelis "need to be aware of the effects of those operations on innocent people."
One Israeli was killed last Wednesday by a rocket attack. Two Israeli soldiers have also been killed in fighting in Jebalya.
"She (Rice) is not willing to use the word ceasefire between Israel and Hamas because that would give the appearance -- at least according to U.S. officials -- that Hamas is a viable entity with whom somebody can negotiate," CTV's Janis Mackey Frayer reported Tuesday from Jerusalem.
Abbas, leader of the Fatah party, lost power in Gaza last June to Hamas but his forces still control the West Bank.
"Abbas needs to muster some sort of credibility among Palestinians on the West Bank to show that he is a tough player and that he is not going to stand for this as far as Israel is concerned," said Frayer.
The concern is that perhaps the violence in Gaza will enrage Palestinians in the West Bank and cause clashes between them and Israel, said Frayer.
Israeli Prime Minister Ehud Olmert and Abbas have both agreed to a December target for a peace agreement.
But Hamas, which doesn't recognize Israel's right to exist, is vowing publicly to continue its attacks.
"The battle and confrontation will continue and will expand even further than it has reached," Hamas strongman Mahmoud Zahar told a crowd Monday.
However, Zahar later told reporters that Hamas was in touch with an unidentified third party to discuss and end to the ongoing violence.
With files from The Associated Press
