The government needs to take a hard look at the situation in the Gaza Strip, because if it doesn't, it will have to ask itself five years from now how it allowed the situation there to get out of hand, Prime Minister Ehud Olmert told the cabinet Sunday. Olmert's comments came during a discussion about the calm in the Gaza Strip, whether it was holding, and how Israeli should respond to Palestinian infractions. Olmert said he would hold a security cabinet meeting on the situation in Gaza, because the calm was enabling Hamas to build itself up and creating a "problematic" reality. Just as the situation in the North was not as bad as some people believed it was, Olmert said, so the situation in the South was not as good as some would have the ministers believe. He told the ministers that the arms-smuggling from Sinai into the Gaza Strip continued, and that Palestinians had fired on Israeli communities in the western Negev since the calm went into effect last month. The security cabinet needed to meet and discuss how to deal with the situation, he said. Defense Minister Ehud Barak, however, took a more sanguine view of the calm, saying that Hamas was doing more than he'd anticipated to keep the various terrorist organizations inside Gaza from firing rockets into Israel. Unlike Shin Bet (Israel Security Agency) head Yuval Diskin, who said the Egyptians were not doing much more to stop the smuggling into the Gaza Strip than they had done in the past, Barak said there had been a marked improvement in the Egyptian efforts, though he, too, said they were far from what Israel hoped to see. Barak said Israel had acted in the "proper manner" by not responding militarily to violations of the cease-fire, and that the calm was meant as a "time out" that Israel should utilize to improve its situation, in case the cease-fire collapsed and Israel decided large-scale military action was inevitable. Foreign Minister Tzipi Livni, meanwhile, took a hard line on how Israel should respond to the Palestinian cease-fire infractions, saying it was clear that when the Palestinians fired on Israel, Israel should fire back. It was more difficult, she said, to come up with a measured and reciprocal response to the smuggling from Egypt into Gaza. Israel, with its reaction to the cease-fire violations, needed to send the message that it would not put up with continued rocket fire and that it did not matter which organization was doing the firing, Livni said. "Since Hamas was interested in the calm, the chance of escalating the situation is small," she said. One government source said Livni's strident position on the matter had to do with the upcoming Kadima primaries and the battle with Transportation Minister Shaul Mofaz over votes on Kadima's right-wing flank. Diskin, meanwhile, told the cabinet Hamas had a continued interest in preserving the cease-fire, and that the organization was taking advantage of the quiet to increase its level of training and preparation and to build itself up. For instance, he said, concrete allowed into Gaza as a result of the cease-fire was being used by Hamas to build bunkers. He said that the smuggling of arms from Sinai continued and that some four tons of explosives, as well as 50 anti-tank missiles and dozens of light arms, had been smuggled into the Gaza Strip since the cease-fire went into effect. The situation in Gaza, Diskin said, was causing frustration for the Palestinian Authority, and PA Prime Minister Salaam Fayad was behind talks of a Fatah-Hamas government of technocrats, or even putting a combined Fatah-Hamas security apparatus under an Arab umbrella, because he was worried Hamas was benefiting and becoming stronger as a result of the calm.