The Saudi Arabian monarchy vowed to spend $1 billion to help rebuild the Gaza Strip after a devastating three-week war between Hamas and Israel but warned the Jewish state that an Arab 2002 peace offer was imperiled and that conflict could be renewed.

"Israel must realize that the choice between peace and war will not always be open to it," King Abdullah bin Abdul-Aziz said at a long-scheduled Arab League economic forum in Kuwait, according to the Persian Gulf state's official Kuwait News Agency. "The Arab peace initiative will not always remain on the table."

In 2002, Saudi Arabia offered a peace package promising normalized diplomatic and economic relations with Israel in exchange for the establishment of a Palestinian state in the West Bank and Gaza along the borders that existed before 1967.

By offering cash and talking tough, King Abdullah sought to absorb popular anger directed at the so-called moderate Arab states, which have been accused of failing to do enough to halt the Israeli offensive. He also hopes to recapture Saudi Arabia's diminished stature in the Arab world. The nation has been eclipsed by Syria and Iran, which support Hamas, and Qatar, which emerged as a diplomatic powerhouse in May after bypassing Riyadh in brokering a deal between competing pro-Western and Iranian-backed factions in Lebanon.

In the Gaza Strip, fragile unilateral Hamas and Israeli cease-fires held, though both sides warned of a potential renewal of hostilities. Gazans dug themselves out of rubble and buried their dead. More than 1,300 of Gaza's 1.5 million residents were killed in the fighting, many of them civilians.

In Gaza, a representative of the military wing of Hamas said only 48 of its thousands of fighters were killed. Israel claims 400 were killed.

His face covered with a traditional black-and-white Arab scarf, the man describing himself as Abu Obeida also detailed the group's operations and tactics during the war and vowed to continue smuggling parts to produce the homemade Kassam rockets that Hamas had been firing into Israel before and during the conflict.

"The manufacture of holy weapons is our goal," he said.

Meanwhile, Israeli foreign minister Tzipi Livni warned Hamas against firing rockets. "If Hamas fires one Qassam to the south or anywhere else in Israel, it will be struck again, and Hamas knows it," she said in comments broadcast on Israeli radio. "Now Hamas knows what Israel does when it is attacked. Also the world knows what Israel does when attacked, and even accepts it."

At the conference in Kuwait, even leaders of Arab states friendly to the U.S. lashed out at Israel for using excessive force. "Our weaponless families in Gaza are facing an atrocious Israeli aggression targeting innocents and demolishing all pillars of life," said Kuwaiti Emir Sabah Ahmad Sabah, calling Israel's offensive a "crime against humanity" and a "blatant violation of the simplest principles of human rights."

U.S. forces under the command of President George H.W. Bush restored the Kuwaiti monarchy after Saddam Hussein invaded the country in 1990. The emir pledged an initial $34 million to the United Nations agency that oversees the refugee camps in Gaza.

Syrian President Bashar Assad, speaking at the conference, urged Arab states to adopt a resolution labeling Israel "a terrorist entity."

Syria is allied with Iran and supports Hamas and Hezbollah in a so-called "camp of resistance" that opposes the policies of the moderate Arab states led by Egypt and Saudi Arabia.

Egyptian President Hosni Mubarak, who has been denounced at demonstrations almost as frequently as Israel for his country's refusal to open up its Rafah border crossing to the Gaza Strip, tried to defend his nation at the conference, accusing countries of "using the conflict in Gaza to allow for external forces to intrude on our Arab world," a reference to Iran's belligerent rhetoric against Israel and the moderate Arab states throughout the conflict.

"We support the right of people to resist the occupation," he said. "But a resistance is responsible in front of its people . . . for the victims and suffering it leads to."

In Tehran today, President Mahmoud Ahmadinejad voiced support for Hamas in a phone conversation with the militant group's leader, Khaled Mishaal, the official Islamic Republic News Agency reported.

"This is the outset of the victory and the resistance would complete it with making more achievements in the future," the news agency quoted the president as saying. "The occupiers' withdrawal from the Gaza Strip, removal of the Israeli blockades from the besieged area and reopening of the border crossings would pave the grounds for a complete victory."

Ahmadinejad said, "The people of Iran will side [with] the Palestinian people and government to the end," according to the semi-official Fars News Agency. But Iran has stopped short of committing to fund the reconstruction of Gaza, where damages are estimated at $2 billion.