During her two-day visit, Rice met separately with the leaders of both sides and urged them to start talking again. Negotiations broke down after an Israeli offensive on Gaza in the past week killed 126 people, many of them civilians, and prompted Palestinian Authority President Mahmoud Abbas to suspend talks and insist on a truce.

Although Rice said before leaving Israel that both sides intended to resume negotiations, Abbas said that would not happen while Israel continued its military campaign in Gaza. Israel asserted that the armed incursions of the Strip were aimed at stopping Palestinian home-made rocket fire at the Jewish state.

Rice told reporters that Abbas had insisted on "calm," but not as a condition to restart negotiations. Abbas' spokesman, Nabil Abu Rudeina, confirmed later that his boss "has the intention to restart the peace process and negotiations to end the occupation and [to usher in] the creation of a Palestinian state."

According to AFP news agency Abu Rudeina would not say whether a truce was still a condition. Hours earlier, the Palestinian leader had stressed that talks with Israel "must resume, but only after a truce takes effect."

A Palestinian Authority (PA) official in Ramallah told the Middle East Times that Abbas "is avoiding the word 'precondition' that he is being pressed" to use by Israel and the United States, to circumvent the Palestinians being held responsible for the paralysis in negotiations.

The official said on condition of anonymity that the Fatah-led PA, which was ousted by Hamas from Gaza last June, "cannot meet with Israeli leaders as they pursue their onslaught on our people in Gaza, and certainly cannot announce a resumption of negotiations just hours after Amira was martyred," in reference to a Palestinian infant girl who was killed overnight in an Israeli raid on Gaza.

The 20-day-old baby was the third infant to have been killed among 24 children since the Israeli operation began on Feb. 27. Two Israeli soldiers and an Israeli civilian also died during the offensive, dubbed "Hot Winter."

Besides, added the official, Abbas "has repeatedly stressed to Rice that the PA intends to pursue negotiations, because that is our strategic policy … and he still intends to work toward a final peace deal" before Bush's term ends in January 2009.

The negotiations, which were formally re-launched at a U.S.-sponsored conference in Annapolis, Maryland, in November, have yet to kick off on core issues and much skepticism surrounds the possibility of arriving at a final agreement this year.

With an Israeli decision to continue its military offensive on Gaza, an impoverished coastal strip where 1.5 million people have been living under an Israeli blockade since Hamas' takeover, chances for a resumption of the peace process look dim.

Following a meeting on Wednesday Israel's powerful security cabinet said, "the Israeli government will act continuously, systematically, and over a long period … to put an end to rocket fire and other terror activities in Gaza."

The Defense Ministry indicated that Rice had been informed of its intention to carry out a major operation in Gaza, "if required." Defense Minister Ehud Barak reportedly told the top U.S. diplomat that his government "has a commitment to defend its citizens and although we are not keen to carry out a broad offensive, we will not be deterred from doing so."

Some Arab commentators have accused Rice, who urged Israel to avoid civilian casualties, of endorsing a large-scale offensive against Gaza with the intention of crushing Hamas, which came to power through an overwhelming victory in legislative elections in January 2006.

Critics also charged that Rice came to the region to put "the usual pressure" on the Palestinian leadership in Ramallah to talk peace with Israel despite its deadly incursions into Gaza, thus effectively asking the PA to endorse the Israeli military campaign.

Although Rice made no mention of ending the Israeli offensive, saying that Israel had the right to "self-defense" against the Palestinian militant rocket fire, Abbas indicated on Wednesday that she was responsive to the idea of a truce.

"I spoke today again with Secretary Rice and she will send an envoy, David Welch, to Cairo where intense efforts are being deployed with a view to reaching a truce," Abbas said.

But analysts say a cease-fire is not within Abbas' reach, nor is it in his hands to secure one, considering the political division between the PA and Hamas and what is seen as Israel's exploitation of this animosity to continue its attacks on the Hamas-run Gaza Strip while still seeking to talk peace with Ramallah.

Israeli Prime Minister Ehud Olmert's office said in a statement after the security cabinet meeting that while Israel would work to contain Hamas, it would also "advance the peace process with Abbas."

In addition, Hamas has also rejected appeals for a truce and denounced equating the Israeli operations with the rocket fire. "We are in a state of self-defense," Hamas spokesman Sami Abu Zuhri said Tuesday. "When the siege and all forms of aggression come to a stop then we will see."

Meanwhile, the foreign ministers of the 22-member Arab League on Wednesday indicated they would withdraw the 2002 Saudi-sponsored Arab Peace Initiative, reactivated at last year's Arab summit, if Israel continues to ignore it.

The Initiative offered to normalize ties with Israel in return for its withdrawal from the Palestinian and Arab territories it captured in the 1967 war and to allow the establishment of a Palestinian state.