Luxembourg: Israel has claimed that the explosions on a beach in Gaza that killed eight people last week may have been as a result of a terrorist attack rather than Israeli shelling.

Israeli Foreign Minister Tzipi Livni raised the idea at a news conference with EU officials at the Foreign Affairs Council meeting at the European Union Headquarters in Luxembourg; but insisted that Israel is still looking into "the truth".

She suggested that the explosive may have been 'terrorists' trying to incite Israeli violence.

Livni reiterated Olmert's regret at the deaths of the civilians saying that it is not Israel's policy to bomb or launch artillery at nonmilitary persons.

Israeli General Meir Klifi is in charge of the current military investigation which is to due to report its findings Tuesday evening.

Meanwhile, Israeli Defense Minister Amir Peretz has said in a separate statement that Israel will act with force against any group that attacks them.

"We showed the necessary restraint in light... of the international uproar that resulted, but it's over," Peretz said.

According to military officials Peretz halted a planned large-scale air attack against Gaza for one or two days, giving Palestinians time to end their Israeli assaults and hopefully avoid any future confrontation.