'War to continue'
 
In the past week, Israeli attacks on Gaza have killed more than 20 people, including the commander of the armed wing of the Islamic Jihad group, the most senior Palestinian fighter killed in months.
 
Olmert told his cabinet on Sunday that Israel would continue its operations, which it says is in response to sustained rocket attacks.
 
"Operations against terrorists will continue as they have been conducted for many months. There is no other way to describe what is happening in the Gaza Strip except as a true war between the Israeli Army and terror groups. This war will continue."
 
Hamas last week signalled its readiness for a ceasefire and several Israeli cabinet ministers have said the government should consider the Palestinian armed movement's offer.
 
But Olmert said there could be no ceasefire until Hamas accepted the three conditions set by the Quartet of international peace brokers.
 
"The state of Israel has no interest in holding negotiations with those that refuse to accept the basic principles of the Quartet," he said.
 
"Whoever accepts the Quartet principles will, in principle, be a partner for negotiations. Whoever isn't willing to do so, to our regret, cannot be a partner for dialogue with us. This policy will not change."

Israeli attacks in the past week have
killed more than 20 people [Reuters]
The Quartet is a group of Middle East mediators comprising the UN, the US, EU and Russia.
 
Hamas has previously rejected the conditions.
 
On Saturday, Ahmed Yussef, a political adviser to Ismail Haniya, the ousted Palestinian prime minister and Hamas leader, said the group was prepared to reach a truce with Israel "on the condition that the siege around Gaza is lifted and border crossings are open".
 
He said Israel must also stop "assassinations" and arresting fighters.
 
Israel unilaterally withdrew from the Gaza strip after 38 years of occupation in 2005, but controls all access points in and out of the territory and has tightened its choke-hold since the June takeover by Hamas, which ousted security forces loyal to the rival Fatah faction led by Mahmoud Abbas, the Palestinian president.
 
Palestinians say the stranglehold Israel has over the area has made the entire Gaza Strip one huge prison, despite Olmert's pledge that Israel would continue to allow humanitarian aid into the territory.
 
At the same time, Israeli security officials said that Ehud Barak, Israel's defence minister, was to travel to Egypt on Wednesday to meet Hosni Mubarak, the Egyptian president.
 
The officials said Barak would restate Israel's demand that the Egyptians do more to stop Palestinian fighters from smuggling weapons from Egypt into Gaza.
 
Settlement expansion
 
Meanwhile, Palestinian officials condemned the Israeli construction ministry's plans to build 740 new apartments on occupied Palestinian land next year.
 
The Israeli government plans to build 740 new
apartments on occupied Palestinian land [AFP]
The ministry's proposed budget for 2008 includes 500 apartments for the Har Homa area in East Jerusalem, and 240 at Ma'ale Adumim, just outside Jerusalem and one of Israel's biggest West Bank settlements.
 
Despite international calls for Israel to freeze all settlement activity, Israel says it will continue to build, a move Palestinians say will jeopardise final status talks.
 
Rafi Eitan, the Israeli minister for Jerusalem affairs, told local radio that Israel never promised to halt construction within the municipal borders of Jerusalem, whose eastern sector was annexed by Israel after capturing it in the 1967 Middle East war.
 
Settlements - facts and figures

Between 1967 and 1977 Israel constructed 30 settlements with more than 5,000 settlers, mostly in West Bank

Israel pulled out of all 17 Gaza settlements and four West Bank settlements in August 2005

About 440,000 settlers remain in the West Bank and East Jerusalem

Settlements cost Israeli government about $556m each year

Israel's Separation Wall around occupied West Bank will stretch for more than 700km, looping around most settlements

Based on the current plan, 8.6 per cent of the West Bank falls on the Israeli side of the wall

Wall sections around the Ariel and Ma'ale Adumin settlements most contentious as they cut deep into the West Bank, dividing it from East Jerusalem

Source: Peace Now

He said: "Har Homa is an integral, organic part of Jerusalem.
 
"No promise was ever given to anyone that we wouldn't continue to build in Har Homa, because it is within the municipal borders of Jerusalem."
 
According to Eitan, Ma'ale Adumim "is an integral part of Jerusalem in any peace accord".
 
However, Ahmed Qureia, a senior Palestinian Authority official, said peace negotiations would be meaningless if Israel continued its settlement plans.
 
Speaking on the eve of the resumption of permanent-status negotiations, Qureia criticised what he called hasty Israeli announcements on building more settlements and expanding existing ones.
 
The Palestinians intend to urge the Israeli side during Monday's meeting to freeze settlement building as a pre-condition for continuation of the negotiations, Palestinian sources said.