The Palestinian prime minister welcomed the prospect of talks with Hamas (search), and the violent Islamic group said it would consider a halt to attacks against Israelis, just days after it took part in a deadly strike against a Jewish settlement in Gaza.

The tentative moves Sunday toward a new truce came after Israel retaliated for the attack on the Netzarim settlement by blowing up three empty high-rise buildings across from the isolated Jewish enclave.

In Israel, moderates in Israel's Cabinet called Sunday for the evacuation of the settlement, where 350 soldiers guard 400 settlers.

"Is it right that a battalion of soldiers should guard only 60 families?" Justice Minister Yosef Lapid, leader of the moderate Shinui party, told the Cabinet Sunday.

However, Prime Minister Ariel Sharon (searchbelieves a pullout from the enclave in Gaza would show weakness and encourage Palestinian violence.

Hamas spokesman Ismail Haniyeh said Palestinian Prime Minister Ahmed Qureia (searchhad offered talks toward a new cease-fire with Israel, and Hamas accepted. He said no date has been set.

Late Sunday, Qureia confirmed that he favors talks with Islamic militants responsible for most of the 104 homicide bombings that have killed hundreds of Israelis in three years of conflict.

Qureia has been pushing for cease-fire talks since taking office at the head of a Yasser Arafat-appointed emergency government earlier this month.

"We welcome any meetings or dialogue with the Palestinian factions ... in order to reach a national position that will achieve the national interests of the Palestinian people," he told The Associated Press on Sunday.

He said he would include both Hamas and the smaller violent group, Islamic Jihad, in the talks.

However, Qureia's own position remained shaky. Arafat appointed the emergency Cabinet after Qureia failed, in weeks of wrangling with Arafat's Fatah leadership, to field an agreed slate of Cabinet ministers. The present Cabinet is to serve until Nov. 4, and Qureia has indicated that he will not continue in his post, triggering a new crisis.

Talks with Israel over a cease-fire and the U.S.-backed "road map" peace plan have been stymied by the internal Palestinian discord, because Israel, like the United States, refuses to deal with Arafat, charging that he is tainted with terrorism.

Israel insists that Arafat give up control of Palestinian security forces. Qureia clashed with the veteran leader over appointment of an interior minister who would command the armed police and security.

Israel has said it will not begin truce negotiations until all Palestinian security forces are placed under one command and begin cracking down on militants, a step Qureia has refused to endorse.

A unilateral truce declared by militants June 29 was negotiated through back channels, without the involvement of former Prime Minister Mahmoud Abbas, and broke down several weeks later in a surge of Palestinian homicide bombings and Israeli reprisals.

On Friday, Hamas and Islamic Jihad cooperated in the Netzarim attack, killing three Israeli soldiers, including two women.

Israel hit back early Sunday, blowing up three empty high-rise buildings near Netzarim, charging that militants used the buildings as lookout points.

Israel briefly evacuated 2,000 Palestinians from their homes in the dead of night before destroying the buildings. The explosion rocked the area for miles around and sent up plumes of black smoke and debris and caused damage to many nearby Palestinian homes.

In another development Sunday, Israeli Foreign Minister Silvan Shalom, just back from a trip to Europe, told the weekly Cabinet meeting that European officials plan to set aside $7 million to support a so-called Geneva peace plan.

The unofficial plan, reached by former Israeli and Palestinian peace negotiators, calls for Israel to return almost all land it captured in the 1967 Mideast war in exchange for peace with the Palestinians.

Shalom told the Cabinet that Israel will express opposition to the EU initiative once the funding becomes official, said an Israeli official who attended the meeting.

"We need to fight the Geneva program and the support given it by the Europeans," Sharon was quoted as saying.