Israeli prime minister-elect Ariel Sharon has spoken for the first time since his election to Palestinian leader Yasser Arafat.
Mr Arafat called Mr Sharon and congratulated him on his victory, and the recent birth of two grandsons.
Mr Sharon told him he was interested in resuming peace talks, providing violence stops, according to Sharon adviser Raanan Gissin.
Mr Sharon said Israel and the Palestinians would have to find a way to reach peace, and that security was very important to both peoples.
He told Mr Arafat he wanted to alleviate the suffering of Palestinian civilians, on condition that violence ended and that the Palestinian Authority waged an uncompromising war against terrorism, according to Mr Gissin.
Meanwhile, outgoing prime minister Ehud Barak has informed Mr Arafat in a letter that concessions offered by his government are now off the table, Israeli media report.
Violence continued as Israeli troops and Palestinian militiamen fought gun battles and Islamic militants burned Sharon effigies amid threats to detonate more bombs in Israel. Twenty-seven Palestinians and a Belgian news photographer were injured in a firefight on the outskirts of the West Bank of Ramallah.
Palestinian gunmen taking cover in empty high-rise apartments fired across a traffic circle at Israeli troops shooting from jeeps and nearby rooftops.