The new Palestinian leadership is not doing enough to restrain militants, Israeli Prime Minister Ariel Sharon (search) said Monday, after attackers blew up an Israeli army outpost in Gaza and killed five soldiers.

The comments marked the first time since Yasser Arafat's (search) death last month that Sharon criticized Arafat's moderate successor, Mahmoud Abbas (search), though he did not mention Abbas by name. It was not clear whether the outpost attack would disrupt the fledgling good will between Israel and the Palestinians.

The Islamic militant group Hamas and gunmen with ties to the ruling Fatah movement claimed responsibility for the attack they dubbed "Operation Angry Volcano." Hamas said it had dug a half-mile-long tunnel over four months to reach the outpost.

The attack at sundown Sunday was seen as a challenge to Abbas, who has been trying to persuade militants to halt attacks on Israelis ahead of Palestinian presidential elections Jan. 9. Abbas has criticized the armed Palestinian uprising and enjoys the support of the international community.

Hamas has not given Abbas any guarantees. However, it has limited its attacks to the Gaza Strip in recent weeks, as part of what appears to be a tacit agreement not to carry out bombings inside Israel.

Hamas and other militants have stepped up attacks on Israeli soldiers and settlers in Gaza in recent months, as part of an internal Palestinian power struggle ahead of the planned Israeli withdrawal from the strip in 2005.

Sharon said Monday that progress in peace efforts "depends on the Palestinians, if they will act against terror.'

"By now, we don't see any change," Sharon said, speaking in English.

"Myself and my government would like to move forward toward peace, but it depends on one thing, that it should be quiet and I'm really sorry to say that by now we don't see any changes," he added.

Israel has not said whether it will freeze the possible release of up to 200 Palestinian prisoners. In a first response, Israeli helicopters fired five missiles early Monday at what the army said were Hamas weapons workshops in Gaza City. There were no casualties.

The five soldiers killed Sunday were identified as Bedouin Arabs, all members of Desert Reconnaissance Battalion. The battalion, which consists largely of Bedouins, patrols the Egypt-Gaza border, one of the most dangerous areas during more than four years of Israeli-Palestinian fighting.

Five soldiers were wounded in the double blast, which brought down several structures in the outpost. After the initial explosion, Palestinian gunmen rushed the base, followed by another, smaller blast. A gunman who escaped said he tried to kidnap a wounded soldier, but killed him because the soldier resisted.

The preparations for the attack and the explosion were filmed by Hamas, a method used in the past by the Lebanese guerrilla group Hezbollah, which is increasingly training and funding Palestinian militants.

The Hamas video showed masked men lowering barrels presumably containing the explosives into the tunnel. Another shot showed a huge black plume of smoking rising into the air.

The Israeli military said Monday that the tunnels have emerged as a major threat against troops in Gaza, and that there is no easy way to detect them.

Palestinian smugglers have been digging tunnels in Gaza for decades. During the current round of fighting, tunnels have been used increasingly to smuggle weapons into Gaza and also to attack outposts.

Maj. Sharon Feingold, an Israeli army spokeswoman, said the military has spend millions of dollars on technology aimed at detecting tunnels, so far to no avail. "So now the army is using low-teach means, intelligence and searches for houses where the tunnels start," she said. "It's a strategic problem for the state of Israel."

In another development, imprisoned Palestinian uprising leader Marwan Barghouti on Sunday withdrew from the race for Palestinian Authority president, boosting Abbas' chances to win the Jan. 9 election.

Barghouti had wavered in recent weeks, twice announcing his candidacy and twice withdrawing. Barghouti, 45, is a leader of Fatah's young guard, which has complained that it is being kept from leadership positions.

His candidacy had threatened to split Fatah and open the way for a third candidate to win. Since announcing his renewed bid a week ago, he has come under growing pressure, including from his supporters, to withdraw.

Abbas, 69, is part of the old guard of politicians who returned with Arafat from exile in the 1990s. He has promised reforms, including holding internal Fatah elections in August, in hopes of appeasing the restless younger activists.

In a letter from prison read at a news conference Sunday, Barghouti endorsed Abbas, but was harshly critical of the Fatah leadership. Barghouti listed several demands, but said they were not a condition for his support of Abbas.

Barghouti rejected efforts to disarm militant groups, a key Israeli demand, and said no agreement should be made without release of all prisoners.

Israel has said Barghouti, serving five life terms after convictions in deadly Palestinian attacks, will not be freed.

Polls last week showed Barghouti and Abbas running a close race.

In Israeli politics, meanwhile, teams from Sharon's Likud Party were negotiating with the moderate Labor and ultra-Orthodox Jewish Shas parties to expand Sharon's shaky coalition to enable implementation of Sharon's Gaza pullout plan next year.