Israel should not settle for a truce with Hamas in Gaza, and should instead seek to topple the Islamist rulers of the coastal strip, Israel's Foreign Minister Avigdor Lieberman said on Monday.

"The goal that we have settled on, of seeking a return to calm, is a grave error because it will allow Hamas to reinforce along the lines of Hezbollah," Lieberman told public radio, referring to the Lebanese militia with which Israel fought a 2006 war, killing 1,200, mostly civilians.

"The objective must be to force Hamas out of power," said Lieberman, who heads the ultra-nationalist Yisrael Beitenu party.

"To return to calm accepts a war of attrition in which Hamas can determine when there is a lull and when the front is heating up," he said.

A tense truce appeared to be taking hold between Hamas and Israel early Monday, after both sides stepped back from the brink on Sunday.

The calm came after several days of confrontation between Israel and the Islamist group, which have raised tensions to their highest levels since Israel's 2008-2009 war on Gaza.

The fighting, which has left at least 18 Palestinians dead, came after an anti-tank missile fired from Gaza hit an Israeli school bus on Thursday, wounding two people, one of them a teenager who was critically injured.

Hamas said the attack was in response to an earlier Israeli assassination of three senior members of the Islamist group, but claimed school children were not targeted, citing heavy use of the road where the projectile landed of military vehicles.

Israel responded to the bus attack with air strikes across the Gaza Strip, as Palestinian militant groups fired a barrage of rockets and mortar rounds into southern Israel, causing no further injuries.

But both Israeli and Hamas officials expressed interest in a truce by Sunday, and the rate of rocket fire dropped off significantly as a period of calm took hold. Hamas had offered a truce on Thursday evening, an hour ahead of a series of air strikes that hit targets across Gaza, killing four militants.

Lieberman's opposition to the truce is at odds with the support expressed for a ceasefire by other Israeli officials including Defense Minister Ehud Barak, but he ruled out a coalition breakup over the issue.

"I don't want a government crisis, or to quit the coalition. We can influence much more from the inside than from the opposition," he said.

Others within Lieberman's Yisrael Beitenu party, including National Infrastructure Minister Uzi Landau, expressed support for a new campaign of assassinations targeting Hamas members.

The statements came as Israel's daily Haaretz newspaper reported that the country's attorney general was expected to announce that he intends to filing an indictment against the official on charges of fraud, money laundering, and breach of trust.

A draft indictment will be handed to Lieberman's attorneys and he will be granted the right to a hearing to try to prevent the indictment, Haaretz said.

If indicted, he would be the latest in a string of Israeli leaders to be brought up on charges.