An end to rockets attacks on Israel from the Gaza Strip and suspension of Israeli raids into the Hamas-run territory would make it easier for Palestinian President Mahmoud Abbas to continue to negotiate peace with the Jewish state.

The talks got under way in El Arish, an Egyptian town just south of the Gaza Strip, three days after Israel ended a northern Gaza offensive that killed more than 120 Palestinians, about half of them identified as civilians.

Abbas suspended U.S.-brokered negotiations with Israel in protest at the bloodshed. U.S. Secretary of State Condoleezza Rice said on Wednesday at the end of a visit to Israel and the occupied West Bank that Abbas agreed to resume the talks.

Hamas officials said one of the group's senior leaders, Mahmoud al-Zahar, was heading its delegation in El Arish.

Khader Habib, an Islamic Jihad leader, said the group sent a team to the Egyptian city for "talks about calm".

"The conditions are clear, the Zionist enemy must end all forms of aggression against our people in Gaza and the West Bank and lift the siege on Gaza," he told Reuters.

Hamas has stopped short of saying any truce must include the West Bank.

Israel tightened restrictions at Gaza's frontier crossings after Hamas seized the territory from Palestinian President Mahmoud Abbas's Fatah faction in fighting in June.

Aid groups said in a new report that Israel's blockade had created the worst humanitarian crisis in the Gaza Strip since Israel captured the territory in the 1967 Middle East war. It pulled out troops and settlers in 2005.

MEDIATOR

In a possible sign of movement towards a cessation of hostilities, Prime Minister Ehud Olmert said on Wednesday that Israel would have no need to carry out attacks in Gaza if militants there stopped firing rockets across the border.

Israeli and European officials see Egypt, the first Arab country to make peace with Israel, as key to brokering a truce with Hamas and other militant groups.

The officials said such a deal could include the reopening of the Rafah crossing between the Gaza Strip and Egypt, with European Union monitors.

Israel, the United States and the EU refuse to negotiate with Hamas, which has rejected their demands to recognise Israel, renounce violence and accept existing interim Israeli-Palestinian peace deals.

Violence continued to flare along the Israel-Gaza frontier.

A bomb planted by Palestinian militants killed an Israel soldier at the Kissufim border crossing, an attack claimed by Islamic Jihad.

Militants in the Gaza Strip fired several rockets at Israel and one of them hit a house in the southern town of Sderot, but caused no casualties, police said.

An Israeli air raid on what the military described as a rocket-launching site in the Gaza Strip killed an Islamic Jihad militant.

Militant groups have called their rocket salvoes a response to Israeli raids in the Gaza Strip and in the occupied West Bank.

A senior U.S. official in the region said Washington's main objective for now was to "calm the situation and lower the level of violence" in Gaza.