By Alastair Macdonald

JERUSALEM, Sept 21 (Reuters) - A prominent Hamas official tried to open discussions with Israel to ease confrontation in the Gaza Strip but was rebuffed, a Palestinian official familiar with the situation told Reuters on Friday.

Public broadcaster Israel Radio said Israel rejected an approach from Hamas leader Ismail Haniyeh, through a "mediator", to a senior Israeli defence official before the Israeli security cabinet declared Gaza an "enemy entity" on Wednesday.

The Palestinian source told Reuters that Hamas, which seized control of Gaza in June, had sought talks with Deputy Defence Minister Matan Vilnai, offering to rein in rocket fire into Israel in return for an easing of Israeli border controls.

Haniyeh, Palestinian prime minister until he was dismissed by President Mahmoud Abbas following June's factional warfare in Gaza, has said before that Hamas would discuss practical measures with Israel to ease trade and traffic across Gaza's borders.

But he has not previously offered to negotiate on security issues like the rocket fire by militant groups allied to Hamas.

Hamas spokesman Ghazi Hamad initiated the attempt to contact Vilnai, the Palestinian source said. But the two did not talk.

Hamas issued an official denial that there had been talks with Israeli officials, although it noted that Haniyeh had been engaged in talks with other militant groups in Gaza, proposing that they agree to offer a reciprocal ceasefire with Israel.

A spokesman for Vilnai, deputy to Defence Minister Ehud Barak, said he was unaware of any such approach and added: "There was no contact between Vilnai and anyone from Hamas."

The independent Palestinian news agency Maan quoted an Israeli source saying Vilnai had promised to look into a proposal from Hamad but broke off contact after Wednesday's cabinet decision.

Israel and its Western allies have long shunned Hamas for its refusal to renounce violence and recognise the Jewish state.

Since Abbas, leader of the secular Fatah faction, dismissed Haniyeh's government following the Hamas rout of Fatah forces in Gaza three months ago, Israel has opened talks with Abbas on peace moves and Western aid has resumed to the West Bank.

But the smaller Gaza Strip has been all but sealed off by Israel, with few people allowed to enter or leave the coastal enclave and major transit points for goods closed.

Since declaring Gaza an "enemy entity", Prime Minister Ehud Olmert's security cabinet has said it will now consider cutting supplies of energy from Israel in response to almost daily rocket fire by groups in Gaza such as Islamic Jihad.

(Additional reporting by Nidal al-Mughrabi in Gaza and Avida Landau in Jerusalem)

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