Hamas has instructed its military wing to resume terrorist attacks to try to foil the peace talks between Israel and the Palestinian Authority, the head of the Shin Bet security service, Yuval Diskin, told the cabinet yesterday.

Diskin said terrorism has decreased in the West Bank in the past three years, but this era was coming to a close. "In the coming period, the terror threat will increase in step with developments in the peace process," Diskin said.

He said this assessment was based on specific warnings and that recent attacks showed the potential for terrorism. Attacks were being led by Hamas' military wing in Gaza. Diskin added that Hamas was trying to renew its terrorist activities using members released from Israeli prisons in recent years and by recruiting rebel Fatah activists.

He noted, however, that the Palestinian Authority's security services were showing high motivation in tracking down the people responsible for the attacks two weeks ago against Israelis in the West Bank. The PA was also taking steps to prevent future attacks; Diskin said the PA had arrested the perpetrators of one of the incidents, at Rimonim Junction.

He said Hamas was continuing to grow stronger in the Gaza Strip, but was having difficulty in recent months smuggling weapons due to the death of Mahmoud al-Mabhouh, a senior Hamas military commander. Mabhouh died in Dubai at the hands of Mossad agents, according to foreign reports.