JERUSALEM - A senior member of Israeli Prime Minister Ehud Olmert's party has threatened Palestinian Prime Minister Ismail Haniyeh of Hamas with assassination if the group renews suicide bombings in Israel.

Monday's comments by Tzachi Hanegbi, chairman of parliament's Foreign Affairs and Defence Committee, followed a sharp escalation of violence along the Israel-Gaza frontier and a declaration by Hamas that a 16-month-old truce had ended.

"Yassin and Rantissi are waiting for you, Haniyeh, if you implement the same stance of liquidating Jews, indiscriminate firing, and suicide terror attacks aimed at paralysing Israeli society anew," Hanegbi said on Army Radio.

He was referring to Sheikh Ahmed Yassin, a co-founder of Hamas, and Abdel-Aziz al-Rantissi, another leader of the Islamic militant group. Both were assassinated in Israeli missile strikes in Gaza in 2004.

Hamas, which formed the Palestinian government in March after winning a January election, is sworn to Israel's destruction.

"Threats will not force us to abandon the rights of our people," Hamas spokesman Sami Abu Zuhri said in Gaza in response to Hanegbi's remarks.

Hamas carried out nearly 60 suicide bombings in Israel after the start of a Palestinian uprising in 2000 but halted such attacks in mid-2004 and largely abided by a ceasefire reached in early 2005.

The group is locked in a struggle with moderate President Mahmoud Abbas over a statehood manifesto, penned by Palestinian prisoners in Israeli jails, that implicitly recognises Israel.

Over Hamas' objections, Abbas has ordered a July 26 referendum on the initiative, whose adoption would weaken the Islamist-led government already hard-hit by a halt in international aid over its tough policies towards Israel.

Hamas said it would ask parliament on Monday to declare the referendum illegal, a move that would deepen the crisis with Abbas, who was due to hold further talks with Haniyeh later in the day to try to resolve the dispute.

In response to the planned referendum, two prisoners who helped draft the manifesto, Abdel-Khalez al-Natsheh of Hamas and Bassam al-Saadi of Islamic Jihad, withdrew their support for the document, spokesmen for the two groups said in Gaza on Sunday.

Hamas declared the truce dead on Friday after seven Palestinians, including three children, were killed on a Gaza beach on a day of Israeli shelling.

Israel has said the killings were a mistake and voiced regret, although it has not admitted responsibility. An Israeli military investigation of the incident is under way.

Since ending the ceasefire, Hamas has fired dozens of rocket barrages from Gaza into Israel. In violence on Sunday, Israeli helicopter strikes killed two Hamas militants in Gaza and rockets fired by members of the group wounded an Israeli.

An Israeli government agency has issued a tender to build 54 new homes in the occupied West Bank despite an obligation under a United States-backed peace "road map" to halt such construction on land Palestinians seek for a state.

The tender, issued by the Israel Lands Administration, was published in the media on Monday.

Hanegbi, a senior legislator from Olmert's Kadima party, is not a member of the prime minister's inner circle.

But his remarks, including a prediction that "confrontation between Israel and Hamas is inevitable" followed an implicit threat that Defence Minister Amir Peretz voiced against the group's leaders during the weekend.

"No one endangering Israelis can turn his name or title into an insurance policy," said Peretz, whose hometown of Sderot near Gaza has borne the brunt of the rocket attacks.