Israeli PM Ehud Olmert has ruled out a ceasefire with Palestinian Islamist movement Hamas unless it recognises Israel and renounces violence.
Hamas, which controls Gaza, has refused to recognise Israel
He was speaking after two Israeli ministers said it should consider a truce after reports, denied by Hamas, that the group was exploring the idea.
But Mr Olmert said the Israeli army was involved in a "real war" in Gaza.
And he told his cabinet the military was making progress in its efforts to stop rocket attacks on Israel.
Israel says over 1,000 missiles and mortar bombs have been fired at it from Gaza since Hamas took over the strip in June.
More than 20 Palestinian militants, both from Hamas and the smaller Islamic Jihad group, have been killed by Israeli forces in the past week.
Israel has been negotiating with Palestinian Authority President Mahmoud Abbas's West Bank administration despite sharp differences over issues such as Jewish settlements in the Palestinian territories.
"This war will continue," Mr Olmert told his ministers.
Israel stepped up attacks on Gaza over the past week
"The State of Israel has no interest in holding negotiations with those that refuse to accept the basic principles of the Quartet," he said, referring to the international Quartet of Middle East mediators.
"This applies to Hamas, Islamic Jihad and anyone else. He who accepts the Quartet principles is a partner in talks, but he who is not ready to accept them, he is no partner and our policy will not change."
The Quartet, comprising the United States, EU, Russia and UN, has called on Hamas to recognise Israel, renounce violence and abide by interim peace deals.
Hamas has rejected the peace process, relaunched by Mr Abbas with the Israelis in Annapolis in the US, in November.
After reports surfaced in the Israeli media that the group was considering a truce, a Hamas spokesman denied it.
"There is continuous Israeli aggression, and there is resistance," said Sami Abu Zuhri.
"It is up to [Israel] because when they stop all their aggressions we will then discuss the issue."
Israeli infrastructure minister Binyamin Ben-Eliezer and transport minister Shaul Mofaz said earlier that offers of a truce from Hamas should be given serious consideration.
"If Hamas comes to us with a serious proposal for a long-term truce, in my opinion Israel should not reject it," Mr Ben-Eliezer said on Friday.
It would not, he said, be "vital for Hamas to recognise Israel first" as long as the group stopped rocket and other attacks and ceased smuggling arms across the Egyptian border.