Prime Minister Ehud Olmert said Wednesday he would not allow a humanitarian crisis to develop in the Gaza Strip but its residents could not expect to lead normal lives while rockets hit Israel.

Olmert spoke at the annual Herzliya Conference on security, hours after some 200,000 Gaza residents swarmed across the border into Egypt after the border fence was blasted away by militants overnight.

The fence was breached days after Israel imposed a total closure on crossings into Gaza, allowing only a small amount of aid and fuel to get through into the already impoverished coastal territory.

"We will not permit, under any circumstances or conditions, a humanitarian crisis to develop," Olmert said. "We will not harm the supply of food for children, medicine for those who need it and fuel for institutions that save lives. But there is no justification for demanding we allow residents of Gaza to live normal lives while shells and rockets are fired from their streets and courtyards at Sderot and other communities in the south."

"Does anyone seriously think that our children will wet their beds at night in fear and be afraid to go out of the house and they (Gazans) will live in quiet normality?" he asked.

Israel has been carrying out airstrikes and limited ground operations against Gaza militants. Last week Israel imposed a blockade on Gaza, stopping shipments of fuel, medicine and food, but began easing the restrictions on Monday in the wake of an international outcry.

U.S. voices concern over mass entry of Gazans into Egypt Earlier Wednesday, the United States expressed concern over the mass pouring of Gazans across the border.

"We are concerned about that situation and frankly I know the Egyptians are as well," U.S. State Department deputy spokesman Tom Casey said.

Egyptian President Hosni Mubarak announced Wednesday that he had ordered his troops to allow Gazans to cross into Egypt because they were starving.

David Welch, the assistant to U.S. Secretary of State Condoleezza Rice on Middle East issues, has talked to Egyptian authorities about the situation, Casey said, but he didn't offer details. He said the Egyptians take border security seriously and that he has no indication the situation has affected Israeli-Palestinian relations for now.

The Palestinians were stocking up on goods made scarce by the Israeli blockade. The border fence had divided the Rafah area into two halves, one on the Egyptian side and one in southern Gaza.

Earlier Wednesday, U.S. Secretary of State Condoleezza Rice offered a muted response, saying that the U.S. wants to see stability in the region, but that most importantly both the security concerns of Israel and the humanitarian concerns of Gazans must be met.

Hamas: Border must be controlled exclusively by Palestinians, Egypt

Also Wednesday, shortly after the border was breached, Hamas' Damascus-based political leader Khaled Meshal said that his organization would be willing to work to resolve the chaotic situation on the Gaza-Egypt border, but only if the border were placed under exclusive Palestinian and Egyptian control.

Meshal said Hamas was willing to work with Egypt and his rivals in the Palestinian Authority on bringing order to the area.

"We in the Hamas movement and our brothers in the Palestinian government headed by Ismail Haniyeh declare our readiness to reach an understanding with the brothers in Ramallah [Palestinian Authority] and the brothers in Egypt on how to manage those crossings," Meshal said at a Palestinian conference in the Syrian capital.

"The most important standard for lifting the siege on Gaza is that the Rafah crossing be opened and be purely under the Palestinians and Egyptians without any blackmail," he said.

"We don't want to control anything. We want liberty and relief for the Palestinian people," he said.

Meshal also called for the Gaza border crossings with Egypt to be purely controlled by Palestinians and Egyptians.

Under a 2006 agreement after Israel pulled out of Gaza, the Palestinians were given authority over border crossings alongside monitors from the European Union. Israel also had cameras and computers installed there to monitor and vet those crossing.

That agreement collapsed when Hamas violently seized control over Gaza in June, ousting Palestinian President Mahmoud Abbas' Fatah loyalists.

Deposed Palestinian prime minister Ismail Haniyeh of Hamas echoed Meshal's comments Wednesday, calling for an urgent meeting with Fatah and with the Egyptian government to work out a new shared arrangement for Gaza's border crossings.

Haniyeh called for an urgent "speedy meeting in Egypt that would reopen the border crossings on the basis of national participation," meaning that Hamas would be prepared to cede some control to Abbas.

"We don't want to be the only ones in control of these matters," Haniyeh said, speaking from his Gaza City office live on Hamas TV.

Palestinian Prime Minister Salam Fayyad, in talks with German Foreign Minister Frank-Walter Steinmeier, argued Wednesday that Gaza's borders should be opened officially, and also pressed for an end to settlement expansion.

"The Palestinians in Gaza get only very little, which is just enough to survive," Fayyad said through an interpreter after meeting Steinmeier. "What happened yesterday and today is clear evidence that the situation cannot remain this way and that it is important to open the crossings again officially."

Egypt: Gazans allowed to cross border because they are starving

Speaking at the Cairo International Book fair, Mubarak told reporters Wednesday that when Palestinians began breaking through the Gaza-Egypt border at Rafah in force, he told his men to let them in to buy food before escorting them out.

"I told them to let them come in and eat and buy food and then return them later as long as they were not carrying weapons," he said, in answer to reporters' questions.

The Palestinians in Gaza are starving due to the Israeli siege," he said. "Egyptians troops accompanied them to buy food and then allowed them to return to the Gaza Strip."

He said Egypt did not intend to withdraw its ambassador from Israel in protest of the blockade of Gaza. "If that happened, I wouldn't be able to talk to the Israelis. One has to be reasonable in such matters," he added.

Egyptian Foreign Ministry spokesman Hossam Zaki said earlier that the Egyptian authorities planned to "contain" the situation on the Gaza border and were holding inter-agency consultations on how to achieve that objective.

Israel said Wednesday it expects Egypt abide by its agreements and solve the crisis. "It is the responsibility of Egypt to ensure that the border operates properly, according to the signed agreements," said Foreign Ministry spokesman Arye Mekel.

"We expect the Egyptians to solve the problem," he said. "Obviously we are worried about the situation. It could potentially allow anybody to enter."

Meshal said international agreements can be abrogated and noted that Egypt was not a signatory to that 2006 border agreement. As if urging Egypt and Arabs to ignore the agreement, he pointed out that Egypt had in the past nationalized the Suez Canal and Gulf states had nationalized their oil industry.

"I am addressing all the Arabs: Don't say it as an excuse that there is an international agreement concerning the Rafah crossing," he said.

Directly addressing the Egyptians, he said: "This [agreement] is not binding on you or on our people."

He called on Arab countries to help lift the siege on Gaza. "No one can believe that you can't lift the siege ... don't deceive yourselves," he said.

He urged the Arab League foreign ministers' meeting scheduled for Sunday in Cairo to call for lifting the siege on Gaza, which he called the "biggest prison in history."

"Any other decision is unacceptable," he added.