Israel is keeping up its assault on Gaza, while Palestinian president Mahmoud Abbas has severed all contacts with Israel, threatening to sink peace talks.
Prime Minister Ehud Olmert vowed to continue the ground and air operation aimed at halting rocket fire that has killed 70 Palestinians this weekend and earned Israel international condemnation for disproportionate use of force.
Mr Abbas suspended all contacts with Israel over the assault, which has claimed the lives of many Palestinian women and children.
The White House led calls for an end to violence in Gaza.
‘The violence needs to stop and the talks need to resume,’ US National Security Council spokesman Gordon Johndroe told reporters.
The European Union criticised Israel's 'disproportionate use of force.'
The announcement comes just days before US Secretary of State Condoleezza Rice is to arrive in the region on her latest attempt to push forward the troubled peace negotiations revived just three months ago.
‘The negotiations are suspended, as are all contacts on all levels, because in light of the Israeli aggression such communication has no meaning,’ Mr Abbas's spokesman said.
Israel bears the ‘sole responsibility for hindering the peace process and all the effects and consequences of this decision,’ he said.
The two sides revived their peace talks to great fanfare at a US conference in late November, but the negotiations have made little headway since.
Seven more Palestinians, including one civilian, were killed today amid a continuing air and ground blitz aimed at halting militants from firing rockets at Israeli towns from Gaza.
UN condemns Israel
UN Secretary-General, Ban Ki-moon, has condemned Israel for using what he called excessive force in the Gaza Strip and has demanded a halt to its attacks
Addressing an emergency session of the Security Council in New York, Mr Ban also called for an end to the rocket attacks on Israel.
Ehud Olmert rejected mounting international criticism that Israel was using excessive force in one of the world's most densely-populated and impoverished territories.
‘We must remember that Israel is protecting its citizens in the south of the country and that with all due respect, nothing will prevent us from this duty,’ he said.