Israel strikes in Gaza after militants rebuff Abbas

GAZA, May 24 (Reuters) Israel stepped up air strikes in the Gaza Strip today after Hamas and other militant groups rebuffed Palestinian President Mahmoud Abbas's call for a halt to cross-border rocket attacks on the Jewish state.

One of the air strikes targeted a car carrying Hamas militants.

The militants escaped unharmed but at least two people nearby were injured in the blast, witnesses said.

Abbas, whose secular Fatah faction shares a shaky two-month-old unity government with the ruling Hamas Islamists, had hoped to convince militants to stop rocket attacks against Israel as part of a renewed ceasefire with the Jewish state.

But Hamas official Sami Abu Zuhri said Israel's actions showed any ceasefire call by Abbas was ''worthless''.

The Islamist group and others said they would only consider stopping rocket attacks if Israel first called off all of its military operations in Gaza and the occupied West Bank.

Israel has rebuffed similar demands in the past, arguing that its West Bank operations are essential to preventing militant attacks.

Israel also appeared sceptical about another Gaza ceasefire, arguing it could give Hamas the leeway to increase its hold on power and smuggle in more arms.

In addition to Israel's attack on the car, air strikes just before midnight destroyed two buildings -- a food store and a money-changer's office -- owned by Hamas supporters.

An Israeli army spokeswoman said the money-changer had transferred millions of dollars a month from Iran, Syria and Lebanon to Hamas and other groups to buy and manufacture weapons, and to fund militant training.

Abbas held inconclusive talks on Wednesday with Prime Minister Ismail Haniyeh of Hamas and other faction leaders, the first such meetings since a surge in factional violence this month verging on civil war.

Despite the latest ceasefire, tensions between Hamas and Fatah remain high.

An earlier Abbas-Haniyeh meeting had been called off after Israel said on Tuesday it could target Haniyeh if the rocket fire continued.

Some 50 Palestinians were killed in the latest round of factional fighting between Hamas and Fatah.

Israeli air strikes over the last eight days have killed at least 35 Palestinians.

REUTERS SZ PM0542