(Adds Abbas, Haniyeh meet with prospective new unity premier)

By Allyn Fisher-Ilan

JERUSALEM, Nov 18 (Reuters) - A member of Israeli Prime Minister Ehud Olmert's cabinet called on Saturday for Israel to recapture a part of Gaza evacuated a year ago and dismissed moderate Palestinian President Mahmoud Abbas as "irrelevant."

Avigdor Lieberman, an Israeli rightist recently named minister of strategic affairs, told Israel Radio "we have to take back control of the Rafah crossing and the Philadelphi corridor", zones along the Gaza border with Egypt.

Israel accuses the Palestinians of smuggling in tonnes of ammunition across from Egypt, and blames this for a recent spate of rocket fire at southern Israeli towns that killed an Israeli woman on Wednesday and seriously wounded a guard.

Gunmen have stepped up rocket fire at Israel after the deaths of 19 civilians in a Nov. 8 Israeli artillery shelling on the town of Beit Hanoun. Israel apologised but said it was in response to Gaza rocket fire.

Lieberman heads Yisrael Beitenu, a party Olmert added to his coalition to shore up support after criticism of his handling of this summer's war against Hezbollah guerrillas in Lebanon.

While Lieberman's views are more hawkish than most of Olmert's cabinet, his comments reflect growing public frustration with the failure to halt rocket strikes from Gaza.

Israel withdrew forces and Jewish settlers from Gaza last year after a 38-year military occupation.

"I don't think there is reason to conquer Gaza anew," Lieberman said, urging Israel to hit more at militant leaders rather than raid civilian areas.

"There is no point in hitting refugee camps or Beit Hanoun where they live on 10 shekels (about $2.50) a day," he said.

Lieberman said Israel should kill the political heads of militant groups who "should go to paradise, all of them, on this there should be no compromise."

"NO AUTHORITY"

He also criticised Olmert's efforts to sidestep the Hamas-led government that refuses to recognise Israel by dealing with Abbas, saying he was "irrelevant ... he has no authority or strength."

Olmert has said he would meet with Abbas but the talks have been delayed due to thus far unsuccessful efforts to negotiate the release of an Israeli soldier captured by militants in June.

In the latest violence in Gaza, soldiers shot at Palestinian militants who fired an anti-tank rocket at them in the northern town of Beit Lahiya, killing a militant and a 16-year-old, a rescue service said. Three soldiers were wounded in that clash, an Israeli army spokesman said.

In an apparent response to a new push by Washington to kick-start an Israeli-Palestinian peace process, the Hamas-led Palestinian government said Washington should change its policies rather than pressure Hamas to recognise Israel.

Officials and diplomats in Washington said on Friday the United States is preparing for a possible peace push that could include an international peace conference in Jordan this month.

But they said any such meeting hinged on a planned Palestinian unity government meeting the conditions of the Quartet of Middle East mediators: to recognise Israel, renounce violence and abide by past peace agreements.

Hamas rejected the conditions. "The Americans should change their own policy and ask Israel to change its policies toward the Palestinian people," said Ghazi Hamad, a Hamas spokesman.

Abbas and Palestinian Prime Minister Ismail Haniyeh of Hamas met in Gaza for the first time on Saturday with a leading candidate to replace Haniyeh in a unity government. An adviser to Abbas said the negotiations would be completed this month. (Additional reporting by Ali Sawafta and Wafa Amr in Ramallah, Nidal al-Mughrabi in Gaza and Ari Rabinovitch in Jerusalem)

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