JERUSALEM, May 18: Israeli Prime Minister Ehud Olmert said on Sunday that Israel was “very close” to deciding on what action to take to stop continued rocket attacks from the Gaza Strip.

“Under no circumstances can we allow the situation in the south (of Israel) to continue the way it has in recent months, and the crossroads on a decision on how things will be handled is very close,” Olmert said at the weekly cabinet meeting.

He declined to elaborate, amid calls from some ministers for Israel to launch a widescale assault on Gaza to crush militants, who fired a rocket at a shopping mall in southern Israel on Wednesday while US President George W Bush was in the country.

The Palestinians expressed anger on Sunday about the US leader’s perceived bias towards Israel in a speech to the Knesset in Jerusalem this week.

“We don’t want the Americans to negotiate on our behalf... All that we want from them... is a minimum level of neutrality,” said Palestinian president Mahmud Abbas, who met Bush at the Egyptian Red Sea resort of Sharm El-Sheikh on Saturday.

Meanwhile, Israeli Defence Minister Ehud Barak is due in Egypt on Monday for talks with President Hosni Mubarak, whose country has been mediating a possible Gaza truce. Israel refuses direct contact with Hamas.

Several ministers in Israel’s security cabinet have said they favour a large-scale military operation against Hamas.

But according to the Haaretz newspaper, several former Israeli army and security officials have told the government they support indirect talks with Hamas and oppose any major assault on Gaza.

“Recognising that ending the Hamas regime in Gaza is not a realistic goal and that reinstating Fatah in the Gaza Strip by means of Israeli bayonets is not desirable... non-public negotiations should take place with Hamas through Egypt or anyone else acceptable to both sides,” they wrote in a letter to Olmert.

Signatories included ex-Mossad head Ephraim Halevi, former army chief Amnon Lipkin-Shahak and the former commander of Israeli troops in Gaza, Shmuel Zakai.

Hamas, meanwhile, has said it is sending delegations to Egypt on Monday and Tuesday for a new round of talks on a possible truce.

In exchange for stopping rocket attacks, Hamas has said it wants Israel to lift a punishing blockade of Gaza and reopen border crossings, especially Rafah on the border with Egypt.

Israel has demanded an end to both rocket attacks and arms smuggling from Egypt’s Sinai peninsula, and progress in negotiations to release Israeli soldier Gilad Shalit, captured by Palestinian militants in 2006.

On Sunday, Hamas leader Ismail Haniya in Gaza reiterated the Islamists’ demand that 450 Palestinian prisoners must be released in exchange for Shalit.

“We are more concerned about closing this case than the occupier (Israel), and it could be done very quickly if the occupier agrees to the demands of the Palestinian people,” Haniya said.

The fate of Shalit has become a major sticking point in truce negotiations.

“Gilad Shalit has become a deal breaker,” an Israeli official said on Sunday. “If he returns home it would be much easier to reach a truce. But without Shalit I cannot see Israel adopting a truce agreement.” —AFP