Hamas on Saturday rejected accusations by President Mahmud Abbas that it was blocking Palestinian reconciliation efforts with support from Iran.

"The accusations made Abbas that Hamas receives Iranian instructions to block (inter-Palestinian) reconciliation efforts are not true because it is he who is blocking the reconciliation," Hamas MP Yahiya Musa said.

Gaza was in shock and mourning Friday after a radical Islamist group killed an Italian activist hours after kidnapping him in an act deplored by Rome as "barbaric."

Vittorio Arrigoni, 36, who was working with the pro-Palestinian International Solidarity Movement (ISM), was found dead by the security forces in a house in northern Gaza early on Friday.

Iran has smuggled more weapons to Hizbullah, Syria, and Palestinian groups in recent months, taking advantage of the wave of unrest in the Middle East, reported the Israeli newspaper Haaretz on Friday.

Because international attention is focused mainly on regime changes and local intelligence services are busy protecting their rulers, the Iranians have been able to act with greater impunity, it said

Israel should not settle for a truce with Hamas in Gaza, and should instead seek to topple the Islamist rulers of the coastal strip, Foreign Minister Avigdor Lieberman said on Monday.

"The goal that we have settled on, of seeking a return to calm, is a grave error because it will allow Hamas to reinforce along the lines of Hizbullah," Lieberman told public radio.

Israel is ready to stop firing on the Gaza Strip if Palestinian militants in the coastal enclave end a barrage of rocket and mortar fire, Defense Minister Ehud Barak said on Sunday.

His comments came after Gaza's Hamas rulers declared a state of emergency for its security services in the wake of confrontations with Israel that have killed 18 Palestinians since Thursday.

Hamas on Saturday warned Israel of "consequences" after its latest air strike on Gaza killed three members of the radical Islamist group's armed wing.

Medical staff and witnesses said earlier one Palestinian was also wounded in the air strike in the southern Gaza Strip.

Israeli Defense Minister Ehud Barak warned on Thursday that Israel will not tolerate militant attacks, a day after a bombing in Jerusalem left one dead and as Gaza rockets pounded Israel.

"We have to respond," Barak said at a joint press conference with visiting U.S. Defense Secretary Robert Gates shortly after two Grad rockets slammed into the southern port city of Ashdod.

Gaza militants fired seven mortar shells into southern Israel early on Wednesday, just hours after they fired a Grad rocket into the heart of the southern city of Beersheva, the army said.

The seven mortar shells landed in the Eshkol region which lies just northeast of the coastal enclave, causing no injuries or damage, the army said.

At least one Palestinian was injured on Tuesday when an Israeli airstrike hit a group of militants in eastern Gaza City, medics and witnesses said.

Witnesses reported seeing militants trying to fire rockets into southern Israel shortly before the strike, which was mounted by an Israeli drone and hit the eastern Shejaiya district that lies close to the border.

One Palestinian was killed and two people were wounded in an Israeli airstrike on Wednesday which targeted a Hamas training ground near Gaza City, medical officials said.

"One person has been killed and two injured in the airstrike," emergency services spokesman Adham Abu Selmiya said in a statement.