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Prime Minister Ehud Olmert said Monday that he opposed a broad Israel Defense Forces offensive in the Gaza Strip for the time being, despite the ongoing Qassam rocket attacks on the Negev.

Olmert said that he "very much recommends that we not get ourselves embroiled in operations and in [paying] prices that are disproportionate to the constraints we are dealing with."

The prime minister added that he did not wish to minimize the distress caused by Qassam rocket attacks on Sderot and the western Negev. "If we believe that we should do more, we will do more, but there is no need to inflame ourselves."

Speaking to the Knesset Foreign Affairs and Defense Commitee, Olmert said of the embattled Strip, "There's a war there, and Israel is conducting [it] with wisdom. Hundreds of dead in Gaza this year among terror organizations is not an insignificant price for the terrorist groups.

According to Olmert, "the public is no fool. It recalls that in recent years, 2007 was the year with the lowest number of [Israeli] casualties of terrorism."

Olmert calls for a contiguous Palestinian stateOlmert mentioned his support for a contiguous future Palestinian, saying that he sees the need for "two states - one Jewish and one Palestinian, and not three states - one Jewish and two Palestinian."

Olmert stated that security arrangements called for under the road map for Middle East peace must be applied to the Gaza Strip as well. He added that future negotiations on core issues would be conducted together with Palestinian President Mahmoud Abbas, and that the issues would be covered as a whole instead of by separate committees.

The issue of smuggling on the Egypt-Gaza border and the policing of the border by Egypt also came up during the meeting, with Olmert saying that he had "no desire" to fight with Egypt over the issue, or to criticize Cairo in a public manner.

"I think that sometimes it's better to show restraint in making public statements. There are definitely areas that need improvement, and we will handle these issues directly with Egypt."

A spokesperson at Olmert's office denied that his statements were a veiled criticism of Foreign Minister Tzipi Livni's recent public statements that criticized the effectiveness of Egyptian anti-smuggling efforts.

Olmert also said during the meeting that he had told President George Bush that Israel could not reconcile itself to a nuclear Iran, and that the government is "ruling out no options in advance" in barring Tehran from obtaining atomic weaponry.