Palestinian Authority Prime Minister Ismail Haniyeh said Wednesday that the Palestinian government was interested in a cease-fire with Israel, and that the responsibility to advance the cease-fire was not in Israel's hands.

"We in the Palestinian government are in favor of a reciprocal and simultaneous calm ... in the West Bank and in the Gaza Strip. The ball is now on the Israeli court," Haniyeh said after meeting Palestinian Authority Chairman Mahmoud Abbas in Gaza.

Haniyeh's Hamas party, which formed a unity government with Abbas' Fatah two months ago, demands that any cease-fire include an immediate end to all Israeli attacks in both territories, a demand rebuffed repeatedly by Israel.

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The Israel Defense Forces have been conducting a wide campaign of airstrikes on the Gaza Strip and arrests in the West Bank in efforts to deter Palestinian militants from firing Qassam rockets on Israel's southern communities

Damascus-based political leader of Hamas Khaled Meshal said in an interview with the British newspaper the Guardain that Hamas intends to continue its attacks on Israel despite the Israel Defense Forces operations in the Gaza Strip.

In the interview published Wedensday, Meshal said that Palestinians have the right to fight what he called "Zionist aggression," even if their actions are not effective.

"Under occupation people don't ask whether their means are effective in hurting the enemy," he said. "The occupiers always have the means to hurt the people they control. The Palestinians have only modest means, so they defend themselves however they can."

Meshal, largely considered to be Hamas' main powerbroker, slammed the international community for intervening in internal Palestinian affairs, blaming the international boycott of the Palestinian Authority government for the clashes between Hamas and Fatah.

"Palestinians have made some mistakes and wrong bets," he admitted. "But negative foreign intervention, especially by the U.S. and Israel, is responsible for these internal conflicts."

"The siege is collective punishment, and a crime," said Meshal. "And the crime is even worse after the Mecca agreement because Palestinians had expected the siege would be lifted.

"Now the international community is trying to undermine Hamas," he added. "That will lead to an explosion that will be in the face of the Israeli occupation. The damage will affect the stability of the entire region."

On Tuesday, Palestinian security sources said that a dispute has emerged among the Hamas military wing leadership over whether to continue the rocket fire at Israel.

According to the sources, the military wing's commander Ahmed Al-Ja'abari ordered Hamas militants to halt the rocket fire on Tuesday afternoon, due to the political leadership's fear that the organization's losses in Israeli strikes would harm its ability to effectively confront Fatah.

Hamas militants in the northern Gaza Strip, headed by Ahmed Al-Ghandur, ignored the order.

Security cabinet to discuss harsher military action in Gaza
The security cabinet will meet Wednesday to discuss the conflict in the Gaza Strip and to examine Israel's "strategic exit points," as well as the acceptable terms for a cease-fire.

A political source in Jerusalem said Tuesday that Hamas is under increased pressure due to the number of casualties in the strip and the number of arrests in the West Bank.

According to the source, Hamas and Islamic Jihad are experiencing difficulties in firing rockets, due to Israeli pressure, which is evidenced by a reduction in the number of launches.

The source added that the original Palestinian cease-fire offer was not acceptable to Israel, and that "we must see what they offer in the future."

The cabinet is expected to approve a gradual escalation in IDF action should the cease-fire efforts fail.

Prime Minister Ehud Olmert will meet Thursday with PA Chairman Mahmoud Abbas, and Foreign Minister Tzipi Livni will meet Thursday with U.S. Secretary of State Condoleezza Rice in Austria.

Meanwhile, Meretz MKs Avshalom Vilan and Zahava Gal-On have been promoting a new diplomatic initiative for several weeks, one that would give the Arab League responsibility for the coastal strip and install a multi-national force, in cooperation with the European Union.