Prime Minister Olmert appears to have accepted a proposal by the Palestinian Authority government to cease all activity in the Gaza Strip in return for halting Kassam rocket attacks. President Abbas had recently stated that the ongoing rocket attacks on Israel, and especially Sderot, which has triggered the evacuation of much of the town, was against the interests of the Palestinians due to the heavy price they paid in Israeli retaliation. 

Quote: "Palestinian political sources told Ynet on Saturday that Israel will respond positively to the initiative, which they say is aimed at paving the way for talks between Israel and the Palestinian Authority. Hamas's political leader Khaled Mashaal said Saturday that should the political stalemate between Israel and the Palestinian Authority persist, he will declare a third intifada. 

Earlier in the week the Israeli government had rejected the Palestinian proposals. According to the Palestinians, this agreement will see the end of Kassam rocket attacks, but there is no promise to halt suicide bombings, shootings, the stock-piling of munitions and weapons smuggling, while Israel can only look on. For this cause I don't believe it's in Israel's interests to agree to this, and I don't expect this tahdiah (temporary calm) to last very long. Meanwhile, exiled Hamas leader Khaled Mashaal has demanded Israel and the international community thrash out a peace agreement within 6 months, or there will be war.

Quote: ""We give the international community six months for real political horizons... There is a historic opportunity for a Palestinian state within 1967 borders," he told reporters. "Our national demands... are the end of the occupation, the creation of a Palestinian state within 1967 borders without settlements, big or small... "Seize this opportunity. We will not be patient for longer than we have been. If our demands are not met, the Palestinian people will close all political files and launch a third intifada.

Source YNet News, BBC