Hamas is claiming responsibility for the death of an Israeli soldier during a shootout that broke out after Israeli forces entered the Gaza strip. The incident happened only a few hours after a Hamas leader said peace talks with Israel might be possible.
According to the Israeli army and Palestinian officials, the gun battle happened early Tuesday near Deir el-Balah, close to the Israeli border.
The militant wing of the ruling Hamas group and an affiliated group, the Popular Resistance Committees, claimed responsibility for the fatal shooting.
Israeli troops have intensified military operations in the coastal area after militants tunneled into Israel and attacked an army post, killing two soldiers and kidnapping a third on June 25.
Only a few hours before the shooting, a spokesman for the outgoing Hamas administration said a new Palestinian unity government would have "no problem" holding peace talks with Israel.
Ghazi Hamad at the same time expressed doubt that Israel is ready for a deal.
It was unclear if Hamad was voicing official policy or his personal view, or whether he will have a position in the new government.
Speaking to Israel's Army Radio in Hebrew, Hamad also said the Palestinians are ready for an independent state in territories captured by Israel in the 1967 Mideast war. The comments indicated a softening in Hamas' past calls for Israel's destruction.
"This government, with Hamas in the national unity government, we don't have problem accepting a state," Hamad told Army Radio. "We have nothing against negotiations, we have nothing against a diplomatic process but we have rights."
"We have no problem if this government has peace talks with Israel," he said.
Hamad is close to Hamas Prime Minister Ismail Haniyeh, who is expected to retain his position in the coalition government with the more moderate Fatah movement of President Mahmoud Abbas. But in the past, Hamad has made moderate statements that were later denied by other members of Hamas.
The Hamas-led government, battered by months of international sanctions, said Monday that it would form a coalition with Fatah.
Hamas, which Israel and the West have labeled a terrorist group, would agreed to give Abbas authority over dealings with Israel. Abbas has long called for a resumption of peace talks with Israel.
Hamad said that Hamas doesn't believe Abbas will succeed.
"He won't get anything from Israel," Hamad said.
Hamad said the Islamic group is not prepared to formally recognize Israel's right to exist - a key demand by Israel and the West. However, the platform of the new government calls for a Palestinian state alongside Israel - effectively granting recognition to the Jewish state.
Israeli officials have reacted with caution to the planned Palestinian unity government, saying Hamas must still accept three conditions set by the international community: renouncing violence, open recognition of Israel and acceptance of previous peace agreements.
Israeli Defense Minister Amir Peretz said he is hopeful the new Palestinian government will accept these conditions.
"We have to see what the basic guidelines of the government are. If the guidelines include recognition of Israel, it will certainly indicate a change," Peretz said Tuesday.
"On the other hand, we have to make sure that this is not an attempt to make the Hamas government look better when in practice they have no intention of living up to the conditions of the international community," he said.