What's the endgame for Israel and Hamas in Gaza?

Israel and Hamas showed little interest over the weekend in moving toward an internationally brokered cease-fire, as both sides vowed to keep fighting.

As the rockets and missiles fill the skies over Gaza and southern Israel, it sharpens the question: What are the goals – and exit strategies, if any – of each side?

Within the Israeli public, there is a debate about whether the intent of the Israeli military – having already sent large numbers of tanks and ground troops into the Gaza Strip for the first time – is to occupy southern Gaza to prevent smuggling or "go all the way" and topple the Hamas government. Rule of the Gaza Strip might then be turned over to Fatah, the Palestinian party that was ousted in a Hamas military coup some 18 months ago and supports a two-state solution to the conflict.

For Hamas, there appears to be an ideal by which – as part of a cease-fire – the Palestinian militant group will be able to declare itself victorious in reaching all of its demands, including an opening of all crossings into Gaza and an end to the economic blockade enforced by Israel and others in the international community.

The distant likelihood of any of those goals being met is one of the obstacles standing in the way of either side moving with alacrity toward a cease-fire, say analysts. Both sides daily tout their achievements.

After a cabinet meeting Sunday, Israeli Prime Minister Ehud Olmert praised the troops for reaching "impressive goals ... against terror organizations in Gaza." Israelis have the patience and will to press on, he said.

Similarly, Syria-based Hamas Politburo chief Khaled Mashaal insisted that Israel's losses were much heavier than they have let on. Some 870 Palestinians have been killed since the offensive began – Israel says about 300 of them were Hamas militants. Israel has lost 13 people, 10 of them soldiers and three of them civilians.

"The resistance organizations are still at full strength – they took a beating during the first two days, but have since taken the initiative," Mr. Mashaal said following a meeting in Cairo on Saturday night. "The enemy has failed – it has not achieved its goals. The enemy is hiding its true losses. For this reason it is preventing journalists and reporters from entering the Strip."

Maj. Gen. (Res.) Giora Eiland, a former director of Israel's National Security Council, says that Israel might seek a middle option, which would be to take the southern tip of the Gaza Strip, and thereby prevent smuggling of new weapons from Egypt.

"It is possible that Israel will occupy all of Gaza and create a situation in which the regime cannot function," says General Eiland. "The question is whether it's possible and whether we're ready to pay the price. There are two possible goals: one is to obtain a cease-fire, two, the more ambitious of them, is the collapse of Hamas.

"Or there is something in between," he adds. "If we want to make sure that there is no smuggling of weapons [from Egypt into Gaza], we can reoccupy the city of Rafah and its neighborhoods ... since the [Israeli] army doesn't trust the Egyptians to stop that."

Israel continued to bombard Gaza over the weekend, attacking 60 targets on Saturday alone that the IDF (Israel Defense Forces) said were connected to Hamas, including the home of its military commander, Ahmed Jabri. On Sunday, Israeli forces moved south toward Gaza City, the Strip's most densely populated area, killing at least 27 Palestinians, according to Palestinian medical sources.

It's unclear whether Israel is ramping up the Gaza campaign and moving into what was predicted to be a third and final phase, or that this is a continuation of the same lethal force it has been using since it began the offensive on Dec. 27 with the stated goal of ending Hamas's rocket attacks.

But Hamas continued launching rockets (17 at last count Sunday) at various cities in southern Israel on Sunday, hitting Beersheba, Sderot, and other small communities.

On Saturday night, Mashaal said Hamas would not agree to any permanent cease-fire with Israel. One aspect of the French-Egyptian proposal includes the possibility of sending in international observers, which neither Israel nor Hamas seemed keen to accept.

Mashaal, who was in Cairo over the weekend to discuss the cease-fire proposal, said that any international peacekeeping force sent to Gaza would be seen as an occupying entity. He also said that Hamas could not accept the inspection of Gaza's numerous smuggling tunnels by international observers. "The objective of the war in Gaza is to subdue the Palestinian people and to dictate its political concessions," Mashaal said.

Israeli officials reject the suggestion that they have made a decision to overthrow Hamas. But one, who requested anonymity, acknowledged that it was one of many "contingency plans" the Israeli military is weighing.

Following the weekly Sunday cabinet meeting in Jerusalem, an Israeli government spokesman said that Israel has no intention of retaking the Gaza Strip, which it occupied from 1967 to 2005. The spokesman, Cabinet Secretary Oved Yehezkel, pointed to a steep drop in the number of rockets fired from Gaza each day as a mark of Hamas's launching capabilities being curbed. There were 70 missiles a day coming into Israel at the beginning of the operation, and now there are about 20, Mr. Yehezkel told reporters.

Foreign Minister Tzipi Livni, in comments after meeting with Germany's foreign minister Sunday, indicated that Israel has all but given up on getting to any kind of an agreement with Hamas, and so it determined to radically degrade their military capabilities.

"Hamas is no longer in the same position to launch rockets at Israel," Ms. Livni said. "We're not trying to achieve an agreement on paper with Hamas, because we know that it won't be worth the paper it's written on. For the past three years, we have opened opportunities to talk with us. We said that we want recognition of Israel's right to exist and an end to attacks on Israel. But the only language they understand is violence."

In one of the fiercest ground battles so far, Israeli troops battled Palestinian gunmen in a suburb of Gaza City Sunday, the Associated Press reported. In the fighting in the Sheikh Ajleen neighborhood, Hamas and Islamic Jihad said they had ambushed Israeli soldiers.

The United Nations said it resumed on Sunday sending aid convoys into the Gaza Strip after getting assurances from the Israeli military for better coordination within Gaza.

Alleging Israeli soldiers opened fire on an aid convoy on Thursday, the UN Relief and Works Agency (UNRWA) said it was suspending all its operations in Gaza. (Food distribution continued, but supply convoys from Israel were halted.)

"We had a meeting with the coordinator for government activities in the territories, and he expressed regret," said Chris Gunness, a spokesman for UNRWA. "We are keeping a very close eye on what the [Israeli army is] doing."

But Israel's army denied charges by the United Nations that its soldiers had shot at a UN truck in a convoy ferrying humanitarian aid to Gazans. The army said the denial was based on a review of ground and air forces in the area of the shooting, which was near the Erez Crossing at the northern tip of Gaza. An army spokesman said he assumed the gunners were Palestinian.

Separately, the Israeli army admitted that the shelling of a UN school that killed dozens of Palestinian civilians this past week was the result of an errant shell that missed its target, according to Israeli media reports.

• Joshua Mitnick contributed from Tel Aviv.