Egyptian intelligence chief Omar Suleiman said Sunday that if Israel agreed to the terms of a truce deal with Gaza militant groups, he could set a date for starting the cease-fire as early as Monday.

General Suleiman, who has been heavily involved in recent Egyptian efforts to broker a truce between Israel and the various Palestinian organizations in Gaza, made the comments in a meeting with MK Yossi Beilin (Meretz) at Sharm el-Sheikh.

Suleiman stated that Israel's agreement to a proposed truce would enable him to gain that of the Palestinian factions at a meeting in Cairo on Monday.

According to the Egyptian mediator, if Israel agreed to release Palestinian prisoners included on a list submitted by Hamas, it also would be possible to free abducted Israel Defense Forces soldier Gilad Shalit as part of the deal.

Suleiman told Beilin, however, that due to Israel's rejection of the list, the negotiations will need to be started from scratch immediately after the cease-fire comes into force.

Beilin, for his part, told Suleiman that the real test of a cease-fire would be Hamas' ability to prevent other militant groups from firing rockets at Israel.

Last week, a rocket fired from the Gaza Strip struck a crowded shopping mall in southern Israel as U.S. President George W. Bush was visiting the country.

Also Sunday, opposition leader Benjamin Netanyahu urged Egyptian President Hosni Mubarak to halt the smuggling of weapons into the Gaza Strip, adding that Hamas was the mutual enemy of Egypt and Israel.

During their meeting on the sidelines of the World Economic Forum in Sharm el-Sheikh, the Likud chairman told Mubarak that Israel would not hesitate to topple the Islamist Hamas government. He also said that the Iranian issue was clouding regional peace talks.

In response, Mubarak cited the importance of curbing extremist elements in the Middle East and invited Netanyahu to return to Egypt.

At the opening of the weekly cabinet meeting Sunday morning, Prime Minister Ehud Olmert on Sunday warned that Israel would soon reach a critical junction in the way it deals with terror emanating from the Gaza Strip and the ongoing rocket attacks from the Palestinian territory into southern Israel.

"It would be wrong to go into detail and hold discussions through newspaper headlines - suffice it to say that we are convinced that this situation in the south cannot be allowed to continue as it has in recent months. The critical point on a decision of how things will be handled is very close," the prime minister told the cabinet.

"Of course, our mission is to see to it that the residents of the south live tranquil and secure lives without being under constant threat as they have for a very long period," Olmert added.

Israel has been battling militants in the Hamas-ruled Gaza Strip for months. Israeli officials have recently been in discussion with Egyptian mediators about reaching a cease-fire. But continuing violence has raised calls in Israel for military action in Gaza.

Israeli officials fear Hamas will use any lull in fighting to rebuild its strength.

Also Sunday, Defense Minister Ehud Barak met with Speaker of the United States House of Representatives Nancy Pelosi and in efforts to illustrate the situation in the south of Israel he said "every one of you should imagine what would happen if, for 7 years, rockets were fired from Tijuana into San Diego."

Israeli leaders meet attend economic forum in Egypt

Barak was expected to leave for Egypt on Monday to participate in the World Economic Forum in Sharm el-Sheikh, and to meet with Mubarak to discuss the cease-fire as well as the release of Israel Defense Forces soldier Gilad Shalit who has been held captive in Gaza since 2006.

Barak was also scheduled to participate in a panel discussion at the forum, together with Quartet envoy to the Middle East Tony Blair and Palestinian Prime Minister Salam Fayyad.

Foreign Miniter Tzipi Livni, also scheduled to meet with Mubarak at the forum, was expected to press the Egyptian president to take action against the smuggling of weapons from Egypt into the Gaza Strip, and to tell him that there is no point to a cease-fire unless the smuggling stops.

Livni met with Jordan's King Abdullah II on the sidelines of the World Economic Forum on Sunday. During their meeting, the king urged Israel to set the conditions necessary for peacemaking so that an agreement with the Palestinians can be reached this year.

Abdullah also told Livni that Israel must immediately halt settlement activities in the West Bank and end its crippling economic blockade against the Palestinians.He said a Palestinian-Israeli peace deal must be reached this year.