JERUSALEM—Prime Minister Ehud Olmert said on Sunday the Israeli army had a "free hand" to target anyone in the Gaza Strip, particularly ruling Hamas terrorists, to bring an end to cross-border rocket fire at the Jewish state.
Olmert also said the goal of peace talks with Palestinian President Mahmoud Abbas was to reach an understanding on "basic principles" for a Palestinian state by the end of 2008, rather than a full-fledged agreement.
Olmert said Abbas had agreed to postpone talks on the future of Jerusalem until the end of the negotiating process, a move that could anger Palestinians but help Olmert hold together his fragile coalition government for now.
"I don't know if we will be able to reach an understanding with the Palestinians. I hope we will. We'll do everything in our power to. But we will not start with the issue which is the most difficult," Olmert said of Jerusalem.
Israel asserts that it can maintain parallel tracks with the Palestinians, one aimed at reaching a statehood agreement with Abbas and the other at breaking Hamas's hold on the Gaza Strip.
Olmert has so far been wary of launching a major ground operation in Gaza, which Hamas terrorists seized by force in June after routing Abbas's more secular Fatah faction.
But the Israeli leader faces growing domestic pressure to act against the rocket salvoes, especially after Hamas claimed responsibility for a suicide bombing that killed a woman and a rocket attack that cost an 8-year-old boy part of his leg.

Some members of Olmert's cabinet have urged the army to start assassinating Hamas's political leaders.
"We have completely a free hand to respond, to reach out and to attack everyone (who has) any kind of responsibility on behalf of Hamas," Olmert told Jewish-American leaders in Jerusalem. "That applies to everyone, first and foremost Hamas."
Israeli forces killed three Palestinian militants and a civilian during a ground operation in the Gaza Strip on Sunday.
Frequent Israeli air strikes and ground incursions into the coastal territory have killed some 300 Palestinians in the past year, including dozens of civilians, but failed to prevent rocket fire, which killed two Israelis in the same time period.

Shunned by the West for refusing to renounce violence after beating Abbas's Fatah faction in a parliamentary election two years ago, Hamas says it would cease fire if Israel stops its military operations in Gaza and the occupied West Bank.
Hamas is also demanding an end to an Israeli-led blockade that has cut supplies to the territory's 1.5 million people.
Basic Principles
Olmert said he hoped to be able to sign an "understanding" with Abbas before the end of 2008 that would cover the "basic principles" for statehood, including borders, the fate of Palestinian refugees, as well as Jerusalem.
His comments appeared to run counter to those made by U.S. President George W. Bush last month in a visit to the occupied West Bank. Bush set the goal of trying to get both sides to sign a "peace treaty" before his term ends next January, though he did not spell out what that might entail.
Olmert's government has already lost one of its right-wing coalition partners over the peace talks.
The ultra-religious Shas party has also threatened to bolt if the talks focus on Jerusalem.
"We will postpone dealing with Jerusalem to the last phase of the negotiations," Olmert said, stressing that Abbas had "accepted" his suggestion.
Ahead of a planned meeting between Olmert and Abbas in Jerusalem on Tuesday, visiting French Foreign Minister Bernard Kouchner warned that he saw no real sign of progress since a U.S.-sponsored peace conference in November launched the statehood negotiations. He called the situation dangerous.
Palestinian leaders have voiced increasing frustration that Israel has yet to meet its commitments under a 2003 "road map" peace plan that calls for halting all Jewish settlement activity and for uprooting outposts built without government authorisation in the occupied West Bank.
Israeli leaders say the Palestinians have yet to fulfil their own road map commitment to rein in militants, including those in the Gaza Strip.
While Olmert has imposed a de facto halt to new construction in settlements in the West Bank, he has not called off building in and around Arab East Jerusalem, which Palestinians see as capital of a future state.






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