A brief lull in Israeli-Palestinian fighting is over. As Robert Berger reports from VOA's Jerusalem bureau, a new spike in violence is eroding hopes for a ceasefire.

Palestinians gather around car that carried four militants killed by Israeli undercover forces in Bethlehem, 12 Mar 2008

The Islamic Jihad group fired rockets at Israel from the Gaza Strip, ending a week-long lull as Egypt worked to mediate a truce. The rocket fire came in response to a daring attack by Israeli undercover troops in the West Bank town of Bethlehem. The troops spotted a car with four wanted Palestinian militants and killed them in a hail of bullets.

The local commander of the Islamic Jihad was among the dead. Israel said he was responsible for dozens of attacks on Israeli soldiers and civilians, including suicide bombings.

The Islamic militant group Hamas, which rules Gaza, accused Israel of torpedoing efforts for a ceasefire.

"My advice, my recommendation to Israeli policy makers [is] to rethink about the peaceful approach," said Hamas spokesman Ahmed Yousef. "It is better than this belligerent approach.

But Israeli Defense Minister Ehud Barak said the army ambush in Bethlehem was justified.

Speaking at a military ceremony, Barak said Israel would continue to pursue and strike at terrorists in Bethlehem, in Gaza and wherever they are.

The Bethlehem ambush came hours after Hamas Prime Minister Ismail Haniyeh set out terms for a truce. He demanded that Israel halt military activity in all the Palestinian territories and lift its crippling blockade on Gaza.

But Israel is reluctant. It fears that halting raids in the West Bank will lead to Palestinian suicide bombings in its cities. And Israel believes that a truce in Gaza will enable Hamas and other militant groups to re-arm for the next round of conflict.