Sheikh Yassin said Israel did not want peace
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The Palestinian militant group Hamas has ruled out an immediate suspension of attacks on Israeli targets.
The group's spiritual leader, Sheikh Ahmed Yassin, said it was prepared to have a dialogue with Palestinian Prime Minister Ahmed Qurei.
But he said a truce had failed in the past because Israel did not want peace or security for the Palestinians.
Sheikh Yassin was responding to a call by Mr Qurei for Palestinian militant groups to end acts of violence.
He and other Hamas leaders were addressing several hundred followers who had gathered after Friday prayers at a rally in Gaza City.
Resistance
Hamas and another militant group, Islamic Jihad, declared a unilateral truce in June.
Hamas suspended the truce seven weeks later, after Israel killed Hamas co-founder Ismail Abu Shanab in retaliation for the suicide bombing of a Jerusalem bus that left 21 people dead.
Sheikh Yassin told supporters that Hamas was ready to listen to Mr Qurei, who called for a ceasefire with Israel when his new cabinet was sworn in on Wednesday.
But he said that under the present circumstances, there was "no room" for a truce.
He said: "We declared a truce in the past, but it failed because Israel did not want peace or security for the Palestinian people."
Also addressing the rally was another Hamas leader, Mahmoud al-Zahar, who urged his followers to continue "armed resistance" against Israel.
Both Sheikh Yassin and Mr Zahar were targeted by Israeli air strikes in September, but they escaped with minor injuries.
Concrete steps
On Thursday, the Israeli Foreign Minister, Silvan Shalom, said Prime Minister Ariel Sharon would meet Mr Qurei within 10 days.
However, an unnamed senior Israeli government source told Reuters news agency that the meeting had to continue where the stalled US-backed road map peace plan had left off.
The source said that meant concrete steps by the Palestinians to fight terrorism.
Palestinian negotiator Saeb Erekat also sounded a note of caution, saying the Palestinians needed to prepare for the meeting.