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Hamas said Thursday that any Gaza Strip cease-fire with Israel must include an end to Israel Defense Forces operations in the West Bank, as Egypt launched talks with Hamas and Islamic Jihad in a bid to secure a truce.

Hamas spokesman in Gaza Ayman Taha told A-Shams Radio that the Hamas delegation dispatched to the Egyptian city of El-Arish on the Sinai Peninsula had returned to the Strip.

"We spoke about general issues relating to calm and a cease-fire," he said. "Hamas' conditions are clear: We will halt our fire in exchange for a complete end to Israeli military operations in Gaza and in the West Bank, and a lifting of the blockade on Gaza."

"Otherwise, we have no intention of halting our activities against Israel," he said.

Taha said the issue of a prisoner exchange that would secure the release of abducted IDF soldier Gilad Shalit was not discussed at the meeting. According to Taha, Egyptian intelligence chief Omar Suleiman will visit Israel in the coming days in order to update Jerusalem on the developments.

Another Hamas official, Mushir al-Masri, said the militant group must have a say in the running of the border crossings - a demand Israel would likely oppose.

Al-Masri said "Abbas' monopolizing of the crossing management is an extinct ... experiment, and we don't want to fall into those same slippery road again."

Suleiman's deputies met with officials from the two Gaza militant groups, Egyptian security officials said, in an effort to convince Hamas to accept a truce that would involve halting rockets attacks on Israel.

Hamas officials said one of the group's senior leaders, Mahmoud al-Zahar, was heading its delegation in El-Arish.

Khader Habib, an Islamic Jihad leader, confirmed the group sent a team to the Egyptian city for "talks about calm."

"The conditions are clear, the Zionist enemy must end all forms of aggression against our people in Gaza and the West Bank and lift the siege on Gaza," he told Reuters.

Hamas had stopped short of saying any truce must include the West Bank.

Palestinian President Mahmoud Abbas has proposed a truce plan by which Hamas would halt rocket fire into Israel, and in return Israel would stop military activity in the Gaza Strip, the blockade of Gaza would be eased and the main border crossing between the territory and Egypt would be opened, Palestinian officials said.

Egyptian officials have not specified whether the truce discussions they were holding with Hamas were centered on this proposal. Israel has not commented on the proposal, saying only that if the rocket fire stops, Israel will stop going after Gaza militants.

Egypt's Foreign minister Ahmed Aboul Gheit said earlier this week that Egypt is holding talks with Hamas to push it to sop the firing of missiles.

"The is the only way to pressure Israel to halt its attacks," he said.

Egypt appears to have launched its mediation bid under heavy pressure from its ally, the United States.

U.S. official: Washington favors easing Gaza blockade

A senior U.S. official in the region said Thursday that Washington has told Jerusalem it favors easing opening some of Gaza's border crossings to commercial as well as humanitarian supplies in a move that could ease an Israeli-led blockade of the Hamas-run territory.

The official said Washington's main objective was to "calm the situation" in Gaza. Abbas said doing so was key to advancing U.S.-backed peace talks.

"But it's important that we move beyond that as well, and begin to look at issues like the crossing points," said the U.S. official.

"We would like to see a situation where Gaza is not entirely a humanitarian problem and that there can be some commercial activity as well, so that the people can support themselves. And that will require a conversation about how to reopen some of these crossing points," the official said.

Egypt building stone and cement wall along frontier

Also Thursday, security sources in Cairo said Egypt is constructing a stone and cement wall on its sensitive frontier with the Gaza Strip to block Palestinians from again breaching the border to circumvent an Israeli-led blockade.

Egyptian workers were removing a barbed wire barrier and replacing it with a 3 meter high wall along the frontier with Hamas-run Gaza, Egyptian witnesses in the border town of Rafah said. Three kilometres of the new wall was already complete.

"The new wall will help Egypt better secure its border with Gaza," an Egyptian security source told Reuters, speaking on customary condition of anonymity.

"The wall that the Palestinians destroyed during the breaching of the Egyptian border was of a low height and easy to breach."

The source would not say if the new wall would be built over the entire length of the 14 kilometers Egypt-Gaza border, or only in specific places.

The wall was being built on Egyptian territory about 20 meters from Egyptian homes in Rafah.

Witnesses said construction began after Egypt sealed the border last month after Hamas militants blew open the Gaza-Egypt border in January, allowing Palestinians to flood into Egypt to seek relief from the blockade. The border has since been resealed.

Egyptian President Hosni Mubarak has said Egypt was working to lift the blockade of Gaza and reopen the Rafah crossing, where Hamas has demanded a key role. Hamas seized control of Gaza in June.

The Egyptian government says it would like the Palestinian Authority, led by President Mahmoud Abbas, to take charge at the crossing point. Abbas and his Fatah group have little influence in Gaza.

Israel to push for deal with Egypt over Gaza border

Meanwhile, Israel announced this week that it intends to push for an agreement with Egypt on regulating and safeguarding the Gaza-Sinai border and to better counter the smuggling of weapons into the Strip.

The United States and the European Union have already been involved in the preparations for these talks.

The United States and the European Union have already been involved in the preparations for these talks.

During Wednesday's political-security cabinet meeting, Foreign Ministry officials presented a plan for progressing diplomatically on this issue with Egypt.

The plan's basic principle is that "in the absence of a major ground offensive, it is important to create a new situation in the Gaza Strip, which will include broader military operations and also an effort to reach a new arrangement with Egypt from a position of strength."

According to the plan, in order to bring about a stop to the Qassam attacks, it is necessary to strike Hamas in Gaza, but at the same time solve the problem of smuggling, which enables the organization and other militant groups to replenish their weapons arsenals, and also acquire more advanced equipment.

The Foreign Ministry concluded that the solution to smuggling will not come from IDF operations in the Strip, but through Egyptian action, and therefore it is important to take diplomatic action vis-a-vis Cairo.

Foreign Minister Tzipi Livni said that the situation at the border has changed dramatically and therefore it requires a change in the Israeli outlook about a possible solution.

"We need to choose between Hamas and Egypt," she said. "Dealing with a situation from the past is not relevant. A draw is not acceptable and we need to create a new reality from a position of strength."