Vice Premier Shimon Peres on Sunday said Israel must not intervene in the internal Palestinian fighting in the Gaza Strip, saying that to do so would risk uniting the feuding Palestinians against it.

Since Thursday, 27 Palestinians have died in Gaza fighting between the ruling Hamas party and Palestinian Authority Chairman Mahmoud Abbas' Fatah party.

Some Israeli officials, concerned that the conflict could boil over into a fresh spate of attacks on Israel, advocate a major ground offensive to strike the militants first.

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"We need to leave Gaza to the Gazans," Peres told Army Radio. "Our intervention will not help, on the contrary, it will draw all the fire toward Israel. We need to leave the Gazans to deal with it and hope that it settles itself."

Peres' comments came in response to reports of the Israel Defense Forces' accelerated planning of a possible extended military operation in Gaza.

Israeli Prime Minister Ehud Olmert told his Cabinet on Sunday that Israel was not involved in violence in Gaza, according to a participant in the meeting.

"We have no hand, no involvement in the Palestinian fighting. It is an internal matter about which we are not happy," Plmert said, according to the participant.

Top military sources said Sunday that the escalation of internecine violence was liable to extend to anti-Israel violence. They said no operation was slated to take place immediately, but that IDF activity in Gaza - similar to the 2002 Operation Defensive Shield in the West Bank - may become necessary.

Foreign Ministry Director-General Aharon Abramovich said "there is no doubt we are in the midst of a difficult period."

He said Israel was watching the violence and was concerned at continued weapons smuggling into Gaza as well as rocket fire into Israel despite a November 26 truce.

"It is very important to us to be able to achieve dialogue rather than a military confrontation with the Palestinians. This is what Israel and the international community aim for and I hope this is the line that triumphs," Abramovich said.

The IDF and Shin Bet security service are particularly concerned by the possibility that Hamas will resume suicide bombings or other attacks on Israel, possibly due to accusations that Israel is supporting Fatah, which it is not overtly doing.

Hamas is also accumulating large quantities of Qassam rockets, whose range, accuracy and strength have improved since Israel's withdrawal from Gaza in the summer of 2005. Hamas and Islamic Jihad are thought to have rockets with a range of 15 to 16 kilometers.

27 Palestinians were killed in clashes on Friday and Saturday, most of them affiliated with Fatah, and at least eight were wounded on Saturday. Ten Fatah and Hamas operatives were kidnapped in Gaza and the West Bank over the weekend. Fatah torched Islamic University buildings Friday, and Hamas torched buildings at the Fatah-affiliated Al-Quds Open University.

Meanwhile, Abbas and Khaled Meshal, the head of Hamas' political bureau in Damascus, agreed Friday on an immediate cease-fire in the Gaza Strip, but it was not immediately implemented and the fighting continued over the weekend.

Abbas and Meshal are slated to meet in Mecca, Saudi Arabia on Tuesday to discuss the establishment of a national unity government. Senior officials in Hamas and Fatah said that despite the recent violence between the two groups, an agreement might be reached Tuesday that would leave Hamas Prime Minister Ismail Haniyeh in his post and would give three portfolios to members of neither organization. Fatah officials said they were worried that the violence would escalate if no agreement is reached Tuesday.

Israel currently has no plans to get involved in the fighting between Fatah and Hamas. The violence there has not yet negatively affected the security situation on the Gaza-Israel border, and there has even been a decrease in the number of Qassam rockets that Palestinians have fired at the Negev. Although Islamic Jihad is continuing to plan terror attacks against Israelis, Hamas and Fatah appear to be too occupied with their conflict to attack Israel.

Fatah and Hamas officials agreed in principle on Friday to renew the cease-fire reached the day before, and Haniyeh on Saturday called on all armed men to withdraw from the streets of Gaza. The Palestinian interior minister, a Hamas member, said the groups had agreed to get the gunmen off the streets, remove roadblocks and stop the incitement against each other. However, the roadblocks were not removed and the militants who had been abducted during the fighting were not returned immediately after the truce was renewed.

Fatah allegedly arrests Iranian experts
Israeli security officials on Saturday were having difficulty ascertaining the credibility of Fatah allegations that the group had arrested seven Iranian terrorism experts who had been assisting Hamas.

Fatah said Thursday that it had arrested the Iranians during a raid of the Islamic University, a Hamas stronghold in Gaza City. Hamas has denied the allegation, and Fatah spokesmen would not confirm the report on Friday.

Israeli officials believe Fatah is making an effort to play down the story, either because the initial report was wrong, or because it is true and Fatah is concerned that the capture of the Iranians will get it entangled with the Iranian government.

Israeli security officials said Iranian experts, along with Hezbollah operatives and Palestinians who underwent terrorism training in Iran or Lebanon, have entered the Gaza Strip through Rafah in the last few months. Some arrived via underground tunnels, while others came in through the Gaza-Egypt border.