In Gaza, Seeking Shelter From Israeli Fire

The two parties have been at odds since Hamas's electoral victory in January over how to respond to the international economic sanctions that have choked off most of the government's funds. The United States and European Union also designate Hamas a terrorist organization, a classification that led to a freeze of most foreign aid.

Palestinian Authority President Mahmoud Abbas, who heads the secular Fatah movement, and Prime Minister Ismail Haniyeh of Hamas agreed in principle this week to a unified political program that would usher in a national unity government in the weeks ahead and endorse the creation of a future Palestinian state in the West Bank, Gaza and East Jerusalem, territory occupied by Israel in the 1967 Middle East war.

Since it was founded nearly two decades ago, Hamas has called for an Islamic state across a far larger territory that includes Israel. Abbas and others had hoped the shift in Hamas's position would persuade Israel to revive peace talks, which have been dormant for more than five years.

"I don't think that, at a time ministers are in prison, a national unity government with Fatah can be established," said Ali Jarbawi, a political science professor at Beir Zeit University in the West Bank. "It won't have legitimacy with Palestinian public opinion. What Israel did through these arrests is interfere in a process that would stabilize internal Palestinian relations, thus allowing it to continue to claim that there is no Palestinian partner" for peace talks.

This town, which has been under the arc of Israeli military fire for months, readied itself in small ways Thursday for what many of its 30,000 residents feared was an imminent assault. But Israeli Defense Minister Amir Peretz later postponed a ground incursion into Beit Hanoun, which had been scheduled to begin Thursday evening, after Egyptian diplomats requested more time to negotiate Shalit's release.

A senior Israeli military official said Peretz did so after signs that Khaled Mashal, Hamas's political leader in exile, could be softening his position. Israeli officials and Egyptian diplomats say Mashal, who lives in the Syrian capital of Damascus, has been the most important voice inside the organization opposing Shalit's release.

"If he would change his mind and come around, he really has a lot of influence," the senior military official said. "We will try to wait as long as we can if we feel pressure is being put on him. We are not in a hurry."

But the official also said the operation here was not only about freeing Shalit but also about "weakening the Hamas government" and ending rocket fire into southern Israel. In that sense, the official said, Shalit's release through diplomacy may not be enough to guarantee "our strategy of making sure they know that there will be a very high price to pay for future kidnappings."

Before the operation was suspended, some residents here decamped to stay with relatives, while others prepared to retreat. Some accused Israel of using the capture of one soldier -- at a time when the Israeli government holds 8,503 Palestinians in prison -- to stage an attack that would do little to free him.

Others fired rockets toward Israel. Two of the missiles traced white contour trails against the blue sky during a brief lull in the Israeli artillery barrage.

"We have a plan to withdraw if the Israelis attack," said Hamada Abdullah Hamada, 31, a sergeant with the Palestinian national forces who was manning a makeshift outpost between the town and the Gaza border.

From the five shipping containers that formed the post, Hamada could see flatbed trucks moving Israeli tanks along the border. The two rockets rose from behind a nearby agricultural school a quarter-mile from Hamada's concrete pillbox, and Israeli guns answered minutes later with steady, thumping fire.

Pointing to the tank movements, Hamada said: "Even before the soldier was kidnapped, the Israelis were doing this. They will come in."

Special correspondent Samuel Sockol in Jerusalem contributed to this report.