Speaking to Ynet on Wednesday, the source said the Islamist group is considering the possibility that Israel's leadership will look to divert attention from the investigation. "We are preparing for any scenario, and we won’t be surprised if the Israel side initiates severe escalation."
The operative added that the group is still awaiting Israel's response to Hamas' demands regarding a possible ceasefire. Hamas spokesman Ismail Radwan said Jerusalem is expected to relay its answer in the coming days.
Earlier a spokesman for Palestinian President Mahmoud Abbas said the Palestinian president believes the political crisis in Israel that could unseat Olmert will hurt peace talks.
"No doubt, what's happening will leave a negative impact on negotiations," Nabil Abu Rdainah said in a statement shortly after Defense Minister Ehud Barak called on Olmert to step aside over corruption allegations.
Meanwhile, the United States reaffirmed its commitment to Israeli-Palestinian peace negotiations. "I certainly am not going to try and play pundit in terms of domestic Israeli politics," State Department Spokesman Tom Casey said.
"We are committed to move the peace process forward and that is what we are going to continue to do," Casey said.
"I will tell you what: if there is a change of leadership in the Israeli government, you can come and ask me then about it. But for now, we are working with the president of the Palestinian Authority and the prime minister of Israel and we intend to continue to do so," he said.
Olmert responded to Barak's demand by saying that "I'll continue to function as prime minister; there are those who believe that the launching of any investigation demands a resignation, but I don't adhere to this notion and I will not step down."
Reuters, AFP contributed to the report