Rockets were fired at Israel from Gaza Sunday evening - 20 minutes after a cease-fire was due to go into effect.
Hamas was pressured to hold its fire and rein in smaller organizations during indirect talks with Israel, Sunday.
Hamas, for its part, said it wanted a cease-fire, during the talks brokered by Egyptian intelligence officials and UN special Mideast envoy Robert Serry.
But at 9:20 P.M. Sunday rockets were fired at Israel, 20 minutes after the cease-fire was to due to begin.
However, clocks in Gaza are on winter time, meaning that the rocket was fired at 8:20 P.M. Gaza time. Palestinian journalists said Hamas would respect the cease-fire beginning precisely at 9:00 P.M. Gaza time.
Israel has not yet responded officially to Hamas' declaration of a cease-fire.
"Since the declaration of the cease-fire, firing has persisted. We will decide about continued action in Gaza in keeping with the continued fire or its cessation," sources in the Prime Minister's bureau said.
As early as Saturday morning, in an effort to avoid worsening relations with Egypt following Thursday's terror attack, the government ordered the Israel Defense Forces to greatly reduce its attacks on terrorist targets in the Gaza Strip.
In the 36 hours following the terror attack on the road to Eilat that began the current cycle of violence, the IDF carried out some 20 sorties against terror targets in Gaza, killing 12 activists of the Popular Resistance Committees - including senior members who had planned the attack near Eilat - Islamic Jihad and Hamas' military wing. Three Palestinian civilians were killed, among them a 13-year-old boy.
The IDF targeted smuggling tunnels in the southern Gaza Strip, and tunnels to bring terrorists and weapons into Israel.
However, from Saturday afternoon and until last night, the IDF carried out only four attacks, two against squads about to launch mortars at Israel, and two attacks yesterday afternoon on Hamas positions in Beit Lahia in the northern Gaza Strip and Khan Yunis in the south.
During that time, some 50 rockets and one mortar were fired at Israel, killing Ofakim resident Yossi Shushan in Be'er Sheva and seriously injuring six other people.
Until Friday night, the government still authorized daylight attacks by the IDF, although they carry a greater risk of civilian casualties. But by Saturday afternoon, the air force was authorized to target only terrorists preparing to fire at Israel.
"We must not lose Egypt because of one terror attack," a senior defense official said yesterday. "If the attack near Eilat harms our relations with Egypt, that will be a great victory for the terror organizations."
Meanwhile, despite media reports that GOC Southern Command Tal Russo admitted he had erred Thursday morning in ordering the opening of Road 12 along the Egyptian border, the probe into the incident is still focused at the level of local brigade commanders and the Southern Command.
A senior officer of the General Staff has not yet been appointed to examine decision making in the chain of command, and it is unclear whether such an appointment will be made.
When the probe is completed it will be presented to Chief of Staff Benny Gantz.
The IDF is also planning a separate, joint probe with the Egyptian army, to clarify how three of its policemen were killed, possibly shot by IDF soldiers aiming at terrorists in Egyptian territory.
The Shin Bet security service warned the government of a possible attack on the Egyptian border by the Popular Resistance Committees before it took place, following which the GOC Southern Command and the chief of staff approved increased deployment of forces.
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