The director of the Shin Bet security service, Yuval Diskin, warned Monday against a broad Israel Defense Forces operation in the Gaza Strip, saying it would be detrimental for Israel to get involved in the ongoing Palestinian factional fighting.

"I definitely think we need to draw up a plan," Diskin told reporters in Tel Aviv. "It is possible that at a certain point we will need to act, whether we want to or not, but we must take in account the power struggle currently going on between Hamas and Fatah in the Strip."

"If we don't want to ruin everything, it is not worth it for us to get involved right now," Diskin said.

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Diskin said that Israel must think about the day after an expanded raid, such as the 2002 operation in the West Bank at the height of the intifada.

"Let's say we occupy all of the Gaza Strip, and we carry out an operation like 'Defensive Shield,' the question is, what happens next?"

"If we don't stay there for a long time and there is nobody there to reinstate order when we leave, the terror will resume very quickly," he added.

Diskin: Palestinian government on brink of collapse
According to Diskin, the central problem facing Israel in the West Bank and Gaza Strip is the crumbling of the Palestinian Authority's governmental control.

The Gaza Strip in particular, Diskin said, has seen "disintegration and a return to the clan stage. There is more clan loyalty today than organizational loyalty."

The influence of clans and the desire to avenge through blood the fatalities of recent battles is likely to make it very difficult to achieve a lasting truce, even though the leaders of Hamas appear interested in curbing the violence.

According to Diskin, Hamas and Fatah are close to an agreement on a Palestinian unity government. Palestinian Authority Chairman Mahmoud Abbas, he said, seems especially interested in such agreement. "Abbas prefers unity over confrontation," said Diskin.

The Shin Bet chief said that Hamas has an advantage over Fatah in the military clashes that have erupted between the two groups in Gaza. While Fatah has more gunmen, Hamas militants are better skilled and better equipped, and have more motivation and discipline than their rivals, he said.

Still, the fact that senior figures Fatah understand their difficult situation and are waging a war of survival has instilled a spirit of fighting among their members.

In the West Bank, Fatah enjoys a certain advantage over their opponent, due to the fact that the armed wing of Hamas has been greatly harmed by Israeli security operations in recent years.

"An historical power struggle is occurring now in the Gaza Strip on the future character of Palestinian society," said Diskin. "This may have long-lasting influence also on the state of Israel," he added.

Diskin rejected the possibility of a lasting political compromise between Israel and Hamas. "In the Hamas vision, there is no argument about whether there will be a long-term agreement with Israel."

"To them, all Israeli territory is holy Muslim land that can't be compromised and must be returned to Islamic control. They see only temporary arrangements with Israel. There is no flexibility in ideology," he added.

'Philadelphi becoming one big rabbit tunnel'
The Shin Bet chief said that at this stage, Hamas is not interested in renewing violence against Israel. The group has not carried out a suicide bombing in about two years, and has mostly abided by the cease-fire with Israel.

Over the recent period, Diskin said, Hamas has had to buff up its military force and stabilize its control. According to the Shin Bet, Hamas in 2006 smuggled more than 30 tons of explosive materials from the Sinai Peninsula into the Gaza Strip, compared to five tons in 2005 and less than a ton in 2004.

Diskin added that the Philadelphi Route in Gaza has become "one big rabbit tunnel." He said he believed Egypt has recently absorbed the significance of continued smuggling, and has begun taking preliminary - though as of yet, ineffective - steps to curb it.

The Shin Bet chief said that since Israel's disengagement from the Gaza Strip, terror organizations in Gaza have gained significant capability, despite a drop in the number of Israeli victims of terror.

Diskin also referred to the reports last week that Fatah gunmen arrested
Iranian military experts in the Gaza Strip. He said that the matter was examined closely by the Shin Bet but there was no evidence confirming the veracity of the reports.

The Shin Bet chief did say however that the number of Palestinians traveling abroad and undergoing paramilitary training, especially to Iran, is troubling. "This is the number one threat, more severe than [smuggled] explosives," he said.

IDF mulling Gaza operation
Diskin's comments came a day after Haaretz reported that the Israel Defense Forces has accelerated planning for a possible extended military operation in Gaza.

Senior military sources warned Sunday that the escalation of internecine violence in Gaza 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 Operation Defensive Shield - may become necessary.

Prime Minister Ehud Olmert told his cabinet Sunday that Israel was not involved in violence in Gaza, a participant in the meeting said.

"We have no hand, no involvement in the Palestinian fighting. It is an internal matter about which we are not happy," Olmert was quoted as saying.