Israel threatened to wipe out Hamas if current truce in Gaza collapsed as time ran out on Wednesday on the 72-hour ceasefire with no breakthrough in indirect talks between Israeli and Palestinian negotiators due to "significant disagreements".
"Israel cannot afford a war of attrition...If the current ceasefire is heading towards collapse Israel must take the initiative, even if it means a significant escalation. Finish the story in the shortest time possible," Foreign Minister Avigdor Lieberman said.
The foreign minister also emphasised that Israel should not end the Gaza operation until the bodies of fallen soldiers are returned by Gaza militants.
"If the terrorists from the other sides don't get it, don't understand it, they have to understand they will get in return the bodies of Mohammed Deif, [Ismail] Haniyeh and all of the Hamas leadership in the Gaza strip...My colleagues and I will not accept any resolution, any framework, without the return of the soldiers' bodies," he stressed.
Lieberman also ruled out the possibility of any cooperation with the UN probe into the Gaza war.
International Canadian law expert, William Schabas, known for his criticism of Israel, is to head the United Nations Human Rights Council's probe into Israel's actions in the West Bank, east Jerusalem and Gaza in the last two months.
Israel's ambassador to the United Nations Ron Prosor on Wednesday said that having Schabas lead UN Gaza probe is akin to the ISIS hosting religious tolerance event.
The Israeli foreign ministry said that Schabas's appointment to head the panel proved that Israel cannot expect justice from this body. "The report has already been written and the only question is who signs it," the foreign ministry said.
Prosor in an interview with the Army Radio expressed doubt regarding the legitimacy of the panel due to its perceived anti-Israel bias.
Meanwhile, as the 72-hour ceasefire deadline approaches at midnight on Wednesday, "significant disagreements" are still said to exist between the two sides.
The key disagreements are said to be over the opening of the border crossings between Israel and Gaza, including how the crossings will be supervised and what kind of merchandise will be allowed into Gaza. (more)
Israeli daily Ha'aretz quoted a Palestinian source as saying that Hamas is insisting on a complete end to the blockade of Gaza rather than a mere easing of it, which he termed "a more comfortable occupation".
The Egyptian mediators are said to be trying to find a formula that will satisfy both Israel and Hamas. "The debate is mainly over the wording, not over the fundamental positions," the source reportedly said.
Hamas is said to have agreed to allow representatives of the Palestinian Authority to be stationed on the Gaza side of the border crossings, but it rejects any limitations on the entry of construction materials like cement and steel, which are needed to repair the damage caused by the war.
Israel, however, is concerned that Hamas would use such materials to rebuild its network of attack tunnels rather than for civilian purposes.
Also, Israel's key demand related to demilitarisation of Gaza has been rejected by the militant factions.
Four weeks of violence has killed 1,939 Palestinians and 67 on the Israeli side since Operation Protective Edge began on July 8.
The latest outbreak of violence in the region erupted when Israel launched an offensive that it said was aimed at stopping rockets being fired from Gaza and at destroying a network of tunnels used by Palestinian militants for cross-border attacks.
Image: An Israeli Army reservist reads a newspaper as he sits atop an armoured personnel carrier outside the central Gaza Strip. Photographs: Baz Ratner/Reuters