The Israeli government's decision to maintain intensified military action against the Palestinians, comes amid growing pressure from the far right to topple the Palestinian Authority and its leader Mr Yasser Arafat.
Violence in the region has intensified significantly over the last four days, since Israeli troops mounted parallel incursions into two West Bank refugee camps.
The operations, which left more than 20 Palestinians and two soldiers dead, provoked international calls for an immediate withdrawal and outrage among the Palestinians, who swore bitter revenge. Israel maintains it is attempting to root out radical militants intent on attacking Israel.
Israel's security cabinet announced late last night that it had unanimously approved principles of military operation which would "exert ongoing pressure on the Palestinian Authority and terror organisations."
The action would include more air strikes and operations similar to last week's raids on the refugee camps, and would focus on armed group such as the Al Aqsa Martyrs Brigade, which has claimed most of the attacks on Israeli targets in recent weeks.
The decision to increase military pressure, rather than opt for a return to negotiations or all-out war against Mr Arafat and the Palestinians, reflects the political quandary that Israeli Prime Minister Ariel Sharon is caught in, analysts believe.
With every attack, pressure from the right increases on Mr Sharon to topple Mr Arafat and the Palestinian Authority.
But Mr Sharon does not want to do this because he could lose the support of his coalition partners in the Labour Party, risking a government collapse, and isolate Israel from US and international support.
"It was unlikely Sharon would to do anything that would endanger his fragile coalition," said Mr David Kimche, head of the Israel Council on Foreign Relations.
"If he goes for toppling the Palestinian Authority, Labour will have to leave and if he goes for political negotiations, the right will have to leave, so the only way he can keep his coalition is by taking the middle line, which is what he's doing," according to Mr Kimche.
"He's going to have to chose either the Right, and smash the Palestinian Authority, which he doesn't want to do, or to start, at least in a discreet manner, some very strong political overtures to the Palestinians, which is what I think he will do," he said.
But Mr Mark Heller, principle research associate at the Jaffee Centre for Strategic Studies, said it was unfeasible for Mr Sharon to even consider entering negotiations because it would be an admission of defeat.
"For him to enter negotiations would be an admission of failure in the sense that one of the criticisms of the last government was that it negotiated under fire. He would be highly reluctant to turn around and do the same thing," Mr Heller believes.
The Sharon administration believes entering into negotiations involving Israeli concessions would send the wrong signal to the Palestinians, implying they could "extort more concessions by applying more violence", he said.
"We're now in a war of attrition to see who blinks first. Historically, we know these situations don't go on for ever, but right now, there is nothing to show that either side is willing to throw in the towel," according to Mr Heller.
"There are signs of doubt on both sides about whether this is the right course to pursue, but in this political environment, people who think like this are too easily detected as defeatists," he said.
Mr Sharon spelled it out Monday, telling journalists, "The Palestinians should be hit very hard, because if they don't feel they have been defeated, it will be impossible to return to the negotiating table.
"They should suffer many losses," he added. "Whoever wants to negotiate with them, should hit them hard first, so that they understand that they will not get anything through terrorism."
AFP