Soon after the armed wing of Hamas declared an end to the truce, the group said it fired three rockets at Israel, though no damage or casualties were reported, according to the Agence France-Presse.
"The cease-fire is over and there won't be a renewal because the Zionist enemy has not respected its conditions," said Hamas' Ezzedine al-Qassam Brigades military wing. "We issue a warning to the Zionist enemy: all attacks against the Gaza Strip or any new crime will trigger a large-scale confrontation and we will retaliate very fiercely."
Israel said it wants the truce to continue, but an escalation in rocket fire could bring strong retaliation.
"We are willing to abide by the understandings reached through the Egyptians, but it can't be unilateral. There has to be a total cessation of all hostile fire from Gaza into Israel for calm to succeed," Israeli government spokesman Mark Regev said.
The truce has been an uneasy one since taking effect June 19, and violence has escalated since early November when Israel launched a deadly cross-border raid. The army said it destroyed a tunnel that was going to be used to kidnap Israeli soldiers. Eighteen Palestinians were killed and Israel has reported more than 250 rocket and mortar fire attacks, according to the AFP.
Israel blames Hamas for not stopping attacks often carried out by smaller Palestinian factions, and Hamas says Israel's raids and continued blockade of Gaza violate the ceasefire.
Egyptian Foreign Ministry spokesman Hossan Zaki said in a statement, "Israel needs to show more flexibility by opening the crossing points and allowing essential supplies into Gaza."
He also called on Palestinian factions to work to prevent an escalation "so that the Palestinian population does not end up -- yet again -- paying the price for a confrontation which it did not seek," quoted the AFP.
In Washington, Palestinian Authority President Mahmoud Abbas called for a continuation of the ceasefire and said he would discuss the issue with President Bush during their farewell meeting.