Israel resolved Wednesday to keep striking Palestinians who fire rockets at Israeli border towns and a pre-dawn air attack on northern Gaza killed two members of a Hamas rocket squad.
The supreme leader of the Islamic militant group Hamas, which has been behind the latest surge in rocket attacks, vowed that attacks on Israel would continue, too.
Israel said it was not negotiating a truce with "terror" groups.
Hamas, the senior partner in the Palestinian government, has launched most of the 270 rockets that the Israeli military says have been fired since violence flared in mid-May. The projectiles are crude but they have killed two Israeli civilians.
Israel has hit back with airstrikes that have killed more than 50 Palestinians, most of them militants.
Israel's Security Cabinet met to assess the situation and concluded that Israel's two-week-old military campaign has been effective in "relatively" reducing rocket fire, Prime Minister Ehud Olmert's office said.
"There are results to the Israeli army's actions, and therefore we will continue our operations," Security Cabinet member Isaac Herzog told Army Radio after the meeting.
"Israel is not conducting any negotiations for a cease-fire with terror organizations," Olmert's office added.
In addition to striking back from the air, Israel has conducted limited ground operations inside Gaza, and arrested dozens of Hamas political leaders in the West Bank.
Two Palestinians killed
Two Palestinians traveling in a car in the northern West Bank were killed in an explosion Wednesday night, Palestinian security officials said. They said the cause of the blast was not known. The violent Al Aqsa Martyrs' Brigades group, linked to the moderate Fatah faction, said the two men were its militants and blamed Israel for the attack. But the Israeli army said it had no report of any military activity in the area.
In Berlin, the Quartet of Middle East peacemakers urged a halt to fighting between Israel and Hamas, calling on the Palestinian authority to "do everything necessary" to restore law and order.
The quartet _ Russia, the United States, the United Nations and the European Union _ met Wednesday in Berlin and issued a statement urging "all Palestinians to immediately renounce all acts of violence and respect the cease-fire."
It condemned the firing of rockets into southern Israel from Gaza and the buildup of arms by Hamas militants and "other terrorist groups" in Gaza.
Hamas leader Khaled Mashaal warned from his base in Damascus, Syria, that attacks on Israel would continue despite the Israeli reprisals.
"Under occupation people don't ask whether their means are effective in hurting the enemy," Khaled Mashaal told London's Guardian newspaper in an interview published Wednesday. "The Palestinians have only modest means, so they defend themselves however they can."
The latest cycle of violence is expected to top the agenda of Olmert's meeting next week with Palestinian President Mahmoud Abbas, a moderate who favors peacemaking, but has been ineffective in stopping the militant attacks.
Abbas has proposed a truce agreement that would commit Gaza militants to halt their rocket fire for a month to permit negotiations on a more comprehensive cease-fire including the West Bank, where Israel conducts frequent arrest raids against militants. He has also urged militants to take the first step in forging a new cease-fire, saying the alternative would be the collapse of the Palestinian national unity government.
Militants have said a truce was out of the question as long as Israel kept up its attacks and refused to extend any Gaza cease-fire to the West Bank. Israel has so far rejected the notion of applying the truce to West Bank, especially in light of the latest round of attacks from Gaza.