Gaza's Hamas leader Ismail Haniyeh has warned Israel it would pay a "very high price" if it heeded its foreign minister's call to reoccupy the besieged enclave to try to halt rocket attacks.

Speaking on Sunday to tens of thousands of supporters at a public rally marking 10 years since an Israeli air strike killed Hamas spiritual leader Sheikh Ahmed Yassin, Haniyeh warned Israel that Gaza fighters had far more capabilities than in the past.

Any aggression or crime or stupidity you commit will cost you a very high price.

Ismail Haniyeh, Gaza's Hamas leader

"We tell the enemy and [Israeli Foreign Minister] Lieberman who is threatening to reoccupy Gaza that the time for your threats is over," Haniyeh told a rally in Gaza City.

"Any aggression or crime or stupidity you commit will cost you a very high price."

On March 12, during a two-day flare-up in which Gaza Palestinians fired at least 60 rockets into Israel and the Israelis responded with dozens of air strikes, Lieberman said Israel would have no choice but to reoccupy Gaza, from which it withdrew its troops and settlers in summer 2005.

Israel started an ongoing siege on the enclave after Hamas won the elections in 2006.

"There is no alternative to a full reoccupation of the entire Gaza Strip," Lieberman told Israeli Channel 2 television.

He also restated his movement's opposition to peace talks between Israel and the Palestinian Authority in the Occupied West Bank, the AFP news agency reported.

"Stop negotiating with the enemy," he told the PA. "We will not recognise Israel."

Mushir al-Masri, a top Hamas leader, told the crowd that the group opposes peace talks with Israel and is always prepared for battle.

"Our fingers are on the trigger to defend our people," said al-Masri.

The memorial rally for Yassin took place under the watchful eyes of hundreds of Hamas policemen, who closed off streets around the central Al-Sarraya square and took up positions on rooftops.

Source: Agencies