Infrastructure Minister Benjamin Ben-Eliezer (Labor) said on Sunday following talks with top Egyptian officials, that he thinks kidnapped Israel Defense Forces soldier Gilad Shalit may be released within a few weeks.

Ben-Eliezer informed Shalit's father Noam about the talks he held in Egypt with Egyptian President Hosni Mubarak, Egyptian intelligence chief Omar Suleiman and Egyptian Foreign Minister Ahmed Aboul Gheit.

Shalit was abducted in a Palestinian cross-border attack near the Gaza Strip on June 25.

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Meanwhile, the IDF is formulating a proposal to expand the Gaza operation it began Wednesday, and plans to present the suggestion to the cabinet for approval this week.

Military sources said the army wants to intensify its efforts to prevent the smuggling of weapons along the Philadelphi Route on the Gaza-Egypt border, and to continue to deploy forces in northern Gaza to make it harder for Palestinians to fire Qassam rockets on Israel. The army has already begun preparations for a broader operation.

Palestinians fired two Qassam rockets on Sunday. They landed in open areas in the Negev and caused no injuries.

IDF troops have uncovered 15 out of an estimated 100 arms-smuggling tunnels in southern Gaza since the operation began, and have encountered little resistance so far.

"The situation in the Strip is volatile," Defense Minister Amir Peretz told Jewish Agency officials on Sunday, adding that "the diplomatic standstill cannot constitute an agenda."

Peretz warned the cabinet Sunday that Israel "must not let Gaza become a second Lebanon" and noted: "We have no intention of capturing Gaza and staying there, but we are obligated to act against any terrorist element intending to harm Israel."

"We must strengthen the channel of dialogue with Abu Mazen [Palestinian Authority Chairman Mahmoud Abbas] and the moderate Arab bloc," Peretz told the cabinet. "We must undertake every effort to make it easier for the Palestinians. A humanitarian crisis in Gaza is bad for Israel and only serves terror."

Vice Prime Minister Shimon Peres (Kadima) spoke out against Hamas at the cabinet meeting, saying: "We returned Gaza to the Palestinians and they are tempting fate. Hamas is acting wildly, does not honor agreements that were signed with the [Palestinian] Authority, and is not prepared to sign these agreements."

Khaled Meshal, Hamas' Damascus-based political bureau head, is visiting Saudi Arabia, where he is expected to meet Arab leaders in an effort to resolve the violent dispute between Hamas and Fatah, Saudi newspaper Al-Watan reported Sunday.

Palestinian officials told Haaretz that Meshal will arrive in Cairo over the weekend to speak to Egyptian leaders about a Palestinian national unity government and the release of Shalit.

Also Sunday, Israel Defense Forces troops operating in the West Bank on Sunday killed 23-year-old Mohammed Uda during an arrest raid in the village of Tamun, near Jenin. Troops were searching there for Islamic Jihad activist Bashar Bani Uda.

Violent clashes between Hamas and Fatah operatives continued in Gaza Sunday. Gunmen, apparently from Hamas, killed Fatah's Mohammed Shahada, an officer in the preventive security force, whose family retaliated by torching vehicles belonging to Hamas.