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Israel: Hamas will pay "intolerable price" if attacks go on

JERUSALEM -- Israeli Prime Minister Benjamin Netanyahu warned Hamas on Saturday that it will "pay an intolerable price" if it continues to fire rockets at Israel, but also hinted that Israel would reassess its operations in the Gaza war once troops have demolished Hamas tunnels under the Gaza-Israel border.

Netanyahu said in televised remarks that Israel prefers a diplomatic solution to the recurring conflict with Gaza's Hamas rulers, but will keep all military options open to restore security for Israeli civilians.

Palestinians inspect the wreckage of a building, which was hit in an Israeli strike, in Rafah, in the southern Gaza Strip Aug. 2, 2014. SAID KHATIB/AFP/Getty Images

The Israeli leader spoke after 26 days of Israel-Hamas fighting that Palestinian health officials say has killed at least 1,650 Palestinians, most of them civilians, along with 66 Israelis, all but three of them soldiers.

Hamas has struck a defiant tone throughout the conflict, saying it will not halt fire unless it secures guarantees that Israel and Egypt will lift a seven-year-old border blockade of Gaza.

"We will continue to resist until we achieve our goals," Hamas spokesman Fawzi Barhoum said after Netanyahu's speech, dismissing the Israeli leader's remarks as "confused."

As CBS News correspondent Charlie D'Agata reports from Tel Aviv, Hamas has launched more rockets on Israel -- making Friday's shattered humanitarian cease-fire a distant memory.

Israeli forces are now focusing their attention and firepower on two priorities: smashing what's left of Hamas' weapons and tunnels, and finding a missing Israeli soldier.

Israel continues bloody search for soldier

The Israeli military says 23-year-old Hadar Goldin disappeared in an ambush on the southern end of the Gaza Strip, where Hamas fighters sprung from a tunnel. A suicide bomber blew himself up, killing two Israeli soldiers. Israel accuses militants of then dragging Goldin into a tunnel.

In Gaza overnight, Israeli strikes pummeled the area where Goldin disappeared.

D'Agata reports that Hamas said Saturday they have no idea where Golden could be, having lost contact with its fighters involved in the clashes; they believe he may have been killed in an Israeli airstrike.

Goldin's father, Simha, said, "We are certain that the military will not stop until they have turned every stone and brought Hadar home safe and sound."

US calling on Israel to do more to prevent civilian casualties in Gaza

Earlier Saturday, a Cabinet minister said that Israel won't be sending a delegation to Egypt-hosted indirect truce negotiations with Hamas for the time being.

The minister, Yuval Steinitz, alleged that Hamas had repeatedly violated cease-fire deals and that "this leads us to the conclusion that with this organization there is no point speaking" about any deal.

An Israeli official told The Associated Press that troops will remain in Gaza to wrap up the demolition of Hamas tunnels under the Gaza-Israel border, but that this is a matter of "not much more time." The official spoke on condition of anonymity because he was not permitted to discuss internal government deliberations with reporters.

Israeli media reported that 31 tunnels have already been demolished, and that the mission was close to being complete.

A wounded Palestinian girl arrives at the hospital in Rafah, in the southern Gaza Strip Aug. 2, 2014, following an Israeli military strike. SAID KHATIB/AFP/Getty Images

Netanyahu said that "Hamas needs to understand that it will pay an intolerable price" for continuing to fire rockets, but indicated the military will enter a new phase of the operation after the tunnels are demolished.

"After completing the operation against the tunnels, the military will prepare for our continuing action according to our security needs and only according to our security needs, until we obtain the objective of returning security to you the citizens of Israel," Netanyahu said.

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