JERUSALEM — Israeli Prime Minister Ehud Olmert ordered the army to scale back operations in Gaza on Monday after a sharp drop in Palestinian rocket fire, raising the possibility of a wider truce that would ease the path for peace talks.
Olmert denied talk of a cease-fire with Gaza's Hamas rulers but said there was no need to attack Gaza as long as calm prevailed.
Hamas said it was encouraged by the relative lull, saying it proved that attacks on Israel were paying off. The militant group wants an agreement that would include opening the Gaza Strip's shuttered borders.
Israel, concerned that calm could enable the militants to claim victory and rearm, said it reserves the right to strike at will.
The army said no rockets were fired Monday, and Israel has not carried out any airstrikes or land raids in Gaza since Wednesday. Last week, militants fired an average of more than a dozen rockets a day, while the army struck hard in Gaza, leaving more than 120 Palestinians dead, according to Palestinian medical officials.
The past few days have seen no serious Israeli casualties from rocket fire, though Palestinian militants killed two Israeli soldiers Thursday in a roadside bombing along the Gaza border. Later that day, a Palestinian fired on students at a Jewish seminary in Jerusalem, killing eight before he was shot dead.
The increase in violence in the past two weeks has raised serious doubts about President Bush's goal of forging a peace deal by year's end.
Egypt has been trying to mediate a truce between Israel and Hamas, which violently took control of the Gaza Strip in June, and officials from the warring sides have traveled to Egypt in recent days to discuss the matter.
U.S. chides Israel: State Department spokesman Sean McCormack on Monday chided Israel for the announcement Sunday that hundreds of new Jewish houses would be built in disputed areas of the West Bank and East Jerusalem. "The announcement that we saw from the Israeli government, is it helpful to the process? No, it's not helpful to the process," he said. On Monday, Israeli officials announced plans to build hundreds of additional homes in East Jerusalem. Palestinians have condemned the plans.