Israel has informed foreign diplomats that it would reoccupy Hamas-ruled Gaza if necessary, though it prefers not to do so, the Foreign Ministry said Tuesday, as the IDF operated against defiant Gaza rocket squads. Israel is contemplating a reoccupation of Gaza even as it makes efforts to make peace with Palestinian Authority President Mahmoud Abbas, who controls the West Bank. On Sunday, Abbas called off talks with Israel to protest the high death toll from the IDF's latest incursion into Gaza. Palestinians reported more than 120 dead in the military campaign. Israeli leaders have signaled that a broad invasion of Gaza is in the works to halt rocket fire that is striking closer to Israel's center. In a meeting Monday with foreign diplomats based in Israel, Foreign Minister Tzipi Livni did not rule out an Israeli reoccupation of the Strip, home to 1.4 million Palestinians. Israel pulled its settlers and troops out of Gaza in 2005, and last June, Hamas violently seized control there. "We cannot afford this kind of extreme Islamic state controlled by Hamas," Livni said, according to a ministry statement released Tuesday. Israel evacuated Gaza "not in order to come back, but we might find ourselves in a situation where we have no choice," Livni said. Fighting escalated sharply last week after Israel mounted an onslaught in northern Gaza to go after Palestinian gunmen who have fired closer to Israel's heartland than ever before. Israel pulled out its ground forces on Monday, but has continued the air assaults against persistent Palestinian attacks. Livni told the diplomats that Abbas' decision to halt the negotiations "shows weakness," signaling to Hamas that its attacks from Gaza could influence Abbas' actions. Hamas, meanwhile, urged Abbas to resist Rice's appeals to return to the negotiating table. "Once again, this visit is designed to provide more support for the Israeli occupation to commit new massacres and ... to provide cover for Israeli crimes against the Palestinian people," said Hamas spokesman Fawzi Barhoum. "We do not welcome this visit and are pinning no hopes on it."