Israel has asked the European Union to expand the powers of its monitors at Gaza's border crossing with Egypt to help prevent militants from bringing in money and equipment, EU diplomats said on Friday.

"There is some flexibility" to negotiate the mandate of the monitors, said a senior EU official involved in talks, a month before the expiry of the current mandate at the border. But the official said the bloc would not accept changes that transform the monitoring mission into one with expansive executive powers.

European and Israeli officials sought to play down any discord, but one Western diplomat involved in the matter said preparations were under way in case the EU decided to pull the monitors out of the Rafah crossing with Egypt altogether.

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Tensions in Gaza have escalated since the armed wing of Hamas broke a five-month-old ceasefire earlier this week by firing rockets into Israel in response to the killing of nine Palestinians by Israeli forces last weekend.

One Palestinian security officer was killed in a shootout with fellow Palestinians at Rafah on Friday.

Advisers to Palestinian Authority Chairman Mahmoud Abbas of Fatah have been trying to draw up a security plan aimed at reducing rocket fire and arms smuggling by deploying security forces along a corridor with Egypt and near Gaza's borders with Israel.

But any crackdown could provoke a backlash from Hamas, which last month formed a unity government with Fatah. Both rival factions use the crossing to send forces abroad for training.

'Executive Powers'
Ninety EU monitors have been overseeing the Rafah crossing under an agreement that took effect in November 2005 to help open up Gaza after Israel ended 38 years of occupation.

With the mission set to end on May 24, Israel is pushing for changes to give the European monitors "executive powers", allowing them to carry out arrests and confiscate money and items that could be used in weapons, European diplomats say.

Israeli officials declined comment. High-level talks resume next week and both sides say they hope a deal can be reached.

The Israeli proposal to give the monitors "executive powers" is opposed by some EU states and the monitoring mission itself.

A senior Western diplomat said the Israeli demands and its reluctance to commit to keeping the Rafah crossing open has prompted some in the EU to call for withdrawing the monitors.

Critics say the Israeli plan would undermine Palestinian sovereignty and cast doubt on the mission's neutrality: "This is a monitoring mission. This is not an executive mission," said a senior European diplomat familiar with the deliberations.

Abbas aide Saeb Erekat said Palestinians opposed Israeli changes: "This is an Egyptian-Palestinian passage," he said.

The Palestinians technically control Rafah but Israel often shuts the crossing, citing security threats. EU officials say it has been closed on average for four days a week in recent months.