Israel decided on Wednesday to suspend plans to invade the Gaza Strip in order to give Egyptian-brokered truce efforts more time to succeed.

The decision came despite a new spike in fighting with Palestinian militants. Hours earlier, an Israeli shell aimed at a group of Gaza militants slammed into a nearby house and decapitated a 6-year-old Palestinian girl. A 55-year-old Palestinian civilian and a militant were also killed in clashes across the territory, while two Israeli civilians were lightly wounded by Palestinian mortar fire.

At a meeting led by Prime Minister Ehud Olmert, top political and security officials decided not to launch any broad military action for the time being, but instructed the army to press on with preparations in case the truce talks fail, government spokesman Mark Regev said.

Security officials said Israel's point man for the truce talks, Amos Gilad, would head to Cairo in the next few days to try to advance the cease-fire efforts.

Egypt has been trying for months to mediate a cease-fire between Israel and the Islamic militant Hamas, which has ruled Gaza for the past year.

The Egyptian efforts have faltered over Israel's demand that Hamas free an Israeli soldier captured two years ago and Hamas' demand that Israel end its year-old blockade of Gaza, which has confined 1.4 million Palestinians to the tiny seaside territory, caused widespread shortages of basic goods and deepened poverty.

Regev would not say whether the ministers set a deadline for a truce to take hold. But in the meantime, officials said the current Israeli policy of limited reprisals to Palestinian attacks would continue.

Hamas spokesman Sami Abu Zuhri accused Israel of double-talk. "The government wants to maneuver and blackmail the Palestinian factions while continuing its daily aggression," Abu Zuhri said.

Gaza militants have tormented southern Israel with near-daily attacks for seven years, increasing their fire after Israel withdrew from the territory in 2005 and further stepping up their attacks after Hamas overran Gaza last year.

Israel is suspicious of Hamas' motives in seeking a truce, especially since the militant group has declared it would take advantage of any lull in fighting to rearm.

Israeli leaders are under heavy pressure domestically to pummel Gaza because militants have improved the accuracy and range of the rockets. The attacks have grown more deadly, killing four Israeli civilians so far this year.

Still, Israeli leaders are reluctant to launch a large-scale military campaign liable to result in heavy casualties. They also fear a Gaza invasion could jeopardize the captured soldier, Cpl. Gilad Schalit.

Before Wednesday's decision, Vice Premier Haim Ramon urged a military operation to crush the Iranian-backed Hamas government in Gaza.

"Even those who support the calm say it would only last a month or two, and then Hamas will violate it," Ramon told Army Radio. "Then we will launch the military operation. Everybody agrees that it is just a matter of when."

Although their weapons are crude by comparison with Israel's, the Gaza militants have managed to confound Israel's high-tech army and made life intolerable for thousands of residents in southern Israel.

On Wednesday, troops opened fire at militants preparing to launch rockets, the military said, but a shell tore into a home, killing 6-year-old Hadeel al-Smari, Palestinian medical officials and relatives said. Associated Press Television News footage showed that the girl's head had been blown off.

The military said it identified hitting the rocket squad, but was unaware of any Palestinian civilian casualties.

Hadeel's cousin, Ahmad al-Smari, said the girl was killed in her back yard.

"I am sure that she was up because no one can sleep day or night because of the army fire and clashes near our homes," al-Smari said in a telephone interview from the hospital in the southern Gaza town of Khan Younis.

Militants fire at Israel from the border area where the family lives, but civilians suffer from the Israeli reprisals, he said. "Our lives are hell. We cannot sleep or enjoy peace in our houses because of the army fire," he said.

Israeli military officials say Palestinian militants endanger civilians by using the cover of crowded residential areas to launch attacks.

Hamas reported that one of its gunmen was killed by Israel. Later, a 55-year-old civilian man was killed in an Israeli airstrike on northern Gaza, and a schoolgirl was wounded, Gaza Health Ministry official Dr. Moaiya Hassanain said.

Israeli troops are facing off against Hamas in Gaza while trying to make peace with Palestinian moderates in the West Bank. The two sides formally relaunched talks late last year at a U.S.-sponsored conference, and set a year-end target for reaching a final accord.

But the peacemaking has been fraught with tensions over issues that have derailed past peace talks: Israeli concerns about Palestinian attacks and continued Israeli construction in areas Palestinians claim for a future state.

In newspaper interviews published Wednesday, Palestinian Prime Minister Salam Fayyad said he was "absolutely certain" the two sides wouldn't be able to broker a peace deal by the end of the year.

With this pronouncement, Fayyad joined a growing chorus of Israeli and Palestinian officials who have expressed doubt about the ambitious timeline.