ISRAELI DEFENCE minister Ehud Barak warned on Monday after talks with Egyptian President Hosni Mubarak that continued rocket fire from the Hamas-run Gaza Strip could accelerate a military conflict in the territory.

Barak told Mubarak, whose government is mediating a truce between Israel and Hamas in the Gaza Strip, that "the ongoing rocket fire against civilian targets and terror activity from the Gaza Strip could accelerate an escalation towards a military conflict", his office said.

The defence minister reiterated Israel's demand "to accelerate and advance the talks for the release of captured soldier Gilad Shalit as part of any attempt to normalise the situation on the ground". Barak also called for an end to Hamas' "military build up by thwarting weapon smuggling, terror money transfers and entry of terror activists" into Gaza.

The comments seemed to be aimed at Egypt which Israel has accused of not doing enough to stem arms smuggling.

Barak also met Egyptian intelligence chief Omar Suleiman in the Red Sea resort of Sharm El Sheikh where political leaders and businesspeople are gathered for the Middle East World Economic Forum.

Egypt has been acting as mediator because Israel refuses to negotiate directly with the Islamist Hamas, which seized control of the Gaza Strip in June last year, as it considers the group to be a terrorist organisation.

In exchange for stopping rocket attacks, Hamas has said it wants Israel to lift the blockade of Gaza and reopen border crossings, especially Rafah on the frontier with Egypt.

Israel has demanded an end to rocket attacks and arms smuggling from Egypt's Sinai Peninsula, as well as progress in negotiations to release Shalit, captured by Palestinian fighters in 2006.

But Hamas wants 450 Palestinian prisoners freed in exchange for Shalit, whose fate has become a sticking point in negotiations.

Gaza truce

A Hamas delegation arrived in Cairo on Monday to be briefed on Israel's response to the Egyptian-mediated truce.

The delegation includes three of the movement's Gaza-based leaders, Mahmoud Zahar, Khalil Hayya and Jamal Abu Hashem.

The Hamas leaders led by the political wing's second-in-command Musa Abu Marzouk were to hold talks on Tuesday with Suleiman, who heads the mediation efforts, Hamas spokesman Ayman Taha told AFP in Gaza.

Suleiman flew to Israel on May 12 for talks with Olmert.

Israel is concerned that Hamas would use any truce to build up its arsenal with help from Iran, said Amos Gilad, political adviser to the defence ministry.

France-Hamas talks

France said on Monday it had held talks with Hamas, in an apparent softening of its support for the US-led policy of isolating the Palestinian Islamist group that seized control of the Gaza Strip last year.

Foreign Minister Bernard Kouchner confirmed a report in the French daily Le Figaro quoting a retired ambassador who it said had met senior Hamas officials about a month ago.

"It would be difficult to deny it since the man who is in touch with them has spoken," Kouchner told Europe 1 radio.

"Having contacts is necessary. We had some before the invasion [takeover by Hamas] of Gaza." The US State Department criticised France's decision to have contacts with Hamas, although it did not echo Bush's recent suggestion that negotiating with such groups is tantamount to appeasement.

"We don't think it is wise or appropriate," State Department spokesman Sean McCormack told reporters in Washington. The United States classifies Hamas as a terrorist group.

But US ally Israel said France's position was unchanged.

"We have been in touch with the highest levels of the French government and we have received assurances that there is no change in the position of France vis-a-vis Hamas," Israeli foreign ministry spokesman Arye Mekel said. "France continues to adhere to three conditions of the Quartet." The Quartet of Middle East mediators, made up of the European Union, the United States, the United Nations and Russia, wants Hamas to renounce violence, recognise Israel, and abide by previous agreements.

Hamas official Sami Abu Zuhri confirmed that leaders of the group had met a French representative and envoys from other European countries, and said that it showed Europe realised it was "the wrong policy to isolate and boycott Hamas".

Kouchner played down the talks between France and Hamas.

"They are not relations. They are contacts," he said.

"We have to be able to speak to each other if we want to play a role, if we want our emissaries to go to Gaza, firstly.

“But the real discussion is between Palestinians. We have always said that." Kouchner's ministry said the talks between former ambassador Yves Aubin de la Messuziere and Hamas were a private initiative.

"The trip to Gaza by Mr Yves Aubin de la Messuziere... took place on an individual basis, as is the case for personalities from many countries, and recently President Carter," spokeswoman Pascale Andreani told reporters.

Le Figaro said the Hamas leaders de la Messuziere met included Ismail Haniyeh and Mahmoud Zahar, and he told the paper they had repeated Mishaal's offer of a long-term accommodation with the Jewish state in its pre-1967 war borders.

"They said they were prepared to stop suicide attacks and what surprised me was that the Islamist leaders recognise the legitimacy of Mahmoud Abbas," he said.