Jewish state warns it would strike if Hamas rearms through smuggling tunnels.
The United Nations urged Israel on Wednesday to reopen Gaza crossings as senior officials assessed war damage and the Jewish state warned it would strike again if Hamas rearms through smuggling tunnels.
"If you want to have reconstruction, you have to have cement and construction materials and pipes and spare parts," said UN humanitarian chief John Holmes at a UN-run school hit by an Israeli missile in the northern town of Beit Lahiya.
"Everything has got to come in; that is one of the things we will be insisting on strongly" in discussions with Israel, said Holmes who was touring Gaza along with UN Middle East envoy Robert Serry.
"It is particularly saddening and sickening to see a school destroyed like this," said Holmes at the site of one of four UN-run schools hit by Israeli strikes during the 22-day war that left much of Gaza in ruins.
Speaking a day after new US President Barack Obama called Israeli and Palestinian leaders, Serry said the sputtering Middle East peace process had to be renewed in order to avoid such wars.
"I very much hope that very soon... with vigour a peace process will be renewed because the only reasonable way out is a two-state solution," he said, adding the war was "proof of our collective failure for so long to address the root cause of this conflict which is occupation."
Hamas's chief has called on the West to lift a ban on contacts with his Islamist movement, which is pledged to the destruction of Israel and is banned as a terror outfit by the Jewish state, Washington and most of Europe.
"For the past three years, they have been trying to get rid of Hamas... especially by imposing a blockade," the exiled Khaled Meshaal said in a televised address.
"Now it is time to start to talk to Hamas," which has controlled the Gaza Strip since June 2007.
Two women, two children and an elderly man were wounded on Thursday by fire from Israeli navy boats patrolling the Mediterranean, medics said. The army said it fired warning shots at a fishing boat.
Otherwise mutual Israeli and Hamas ceasefires were holding for a fifth day.
But Israel warned it would attack the territory again if Hamas uses smuggling tunnels under the Egyptian border to re-arm.
"Things must be clear - Israel reserves the right to react militarily against the tunnels once and for all," Foreign Minister Tzipi Livni said.
During its offensive on Hamas, Israel bombed hundreds of tunnels on the Gaza-Egypt border, destroying 150, according to Defence Minister Ehud Barak who on Wednesday issued a warning similar to Livni's.
"If we are forced to, there will be more attacks," Barak said.
The underground networks are used to smuggle supplies and weapons into the coastal strip that Israel has kept sealed to all but basic humanitarian supplies since Hamas - a group pledged to the destruction of the Jewish state - seized power.
Israel declared a ceasefire on Sunday after guarantees from Cairo and Washington to secure the enclave's porous border with Egypt.
Since then hundreds of Palestinians have set about repairing the tunnels damaged by Israeli bombings.
In a final casualty toll, Gaza medics said the Israeli offensive had killed 1,330 people, at least half of them civilians including 437 children. Another 5,450 were wounded, including 1,890 children.
As Israeli envoy Amos Gilad held talks in Cairo on consolidating the Gaza ceasefire, army radio reported Israeli officials had softened their position about releasing Palestinian prisoners in exchange for an Israeli conscript seized by Gaza militants in a cross-border raid in June 2006.
The radio also said Prime Minister Ehud Olmert has decided to deploy maximum efforts in order to get Shalit back before February 10 parliamentary elections in Israel.
Several ministers, including Foreign Minister Livni, as well as Shin Beth chief Yuval Diskin estimate Hamas has been weakened substantially by the 22-day war and that the release of Palestinian prisoners will not allow the Islamists to regroup, radio said.
Israel and Hamas negotiated for months via Egypt on a prisoner exchange deal for Shalit.