By Jeffrey Heller
JERUSALEM (Reuters) - Israel and Palestinian militants inthe Gaza Strip have been holding off from violence that couldjeopardise Egyptian efforts to mediate a ceasefire, sourcesfrom both sides said on Monday.
A truce deal may be key to U.S.-brokered peace efforts andalso benefit Hamas Islamists who control the Gaza Strip andoppose the statehood negotiations between Israel andPalestinian President Mahmoud Abbas of the secular Fatah group.
The number of Palestinian rocket attacks on southern Israelhas dropped sharply since Prime Minister Ehud Olmert said onWednesday that Israeli forces would have no reason to attackthe Hamas-controlled Gaza Strip if the daily salvoes stopped.
Israel has not struck in the territory since Thursday.
And while Israeli and Hamas officials made clear no formalceasefire had been reached, an Israeli political source said onMonday there had been "an exchange of ideas" between the twosides via Egyptian mediators. The source did not elaborate.
The uneasy lull, which Israeli Army Radio attributed to"quiet understandings", follows a five-day Israeli offensive inthe Gaza Strip that killed 120 Palestinians, about half of whomwere identified as civilians by the time it ended a week ago.
The violence had threatened to derail U.S.-brokered peacetalks. In protest at the bloodshed, Abbas briefly suspendednegotiations. They are due to resume later this week.
Amid much scepticism, Washington has said it hopes toachieve a deal before year's end on Palestinian statehood.
The political source said Olmert is keen to calm violencewith Hamas so that talks with Abbas can make progress andenable him to present a viable peace platform to voters shouldthe statehood moves force a new Israeli election.
For Hamas, a ceasefire would be particularly attractive ifit included an easing of an Israeli-led blockade of the GazaStrip.
Israeli generals, however, are concerned that Hamas mighttake advantage of any lull or truce to regroup and rearmfollowing last week's punishing Israeli offensive.
ROCKETS
Over the past three days, Gaza militants from variousfactions have launched four rockets and 10 mortar bombs acrossthe frontier, the Israeli military said.
The sharp cutback, from about 10 to 15 rockets a day a weekearlier, followed a visit by U.S. Secretary of StateCondoleezza Rice to Israel and the occupied West Bank in whichshe appealed for calm.
Israel last carried out an air strike on Thursday.
"If rockets are not launched from Gaza into Israeli cities,there will be no reason to respond," said an Olmert spokesman,asked about the current lull.
Hamas's armed wing has not itself claimed responsibilityfor firing any rockets into Israel since last Monday.
In the absence of Israeli "aggression", Hamas official SamiAbu Zuhri said, the group had no cause to launch rocketattacks.
Khaled al-Batsh, a senior leader of Islamic Jihad which isallied to Hamas in Gaza, said "the lull in rocket-firing has todo with the situation on the ground and the reduction inZionist attacks".
Both groups said Egyptian-mediated truce talks wouldcontinue.
Egypt held inconclusive meetings on Thursday with Hamas andIslamic Jihad leaders, part of a U.S.-backed push for a trucebetween the groups and Israel. A senior Israeli defenceofficial, Amos Gilad, visited Cairo over the weekend.
Hamas and Islamic Jihad leaders said after the session theywould study an Egyptian proposal but were non-committal.
(Additional reporting by Alastair Macdonald and AvidaLandau in Jerusalem and Nidal al-Mughrabi in Gaza, Editing bySamia Nakhoul
