Shin Bet Chief Yuval Diskin went before the Knesset's Foreign Affairs and Defense Committee Tuesday and briefed its members on various matters concerning the fragile armistice with Hamas, terror threats and the Iranian threat.

"If the Palestinian Authority were to hold general elections now, it is highly likely that Hamas would win," he said. Shifting his attention to the PA's efforts to fight terror, Diskin noted that despite recent achievements, "Most of the (terror) preventions are ours."

Israel, he added, stands little chance of maintaining viable peace negotiations as long as Hamas rules the Strip. "Hamas will never relinquish its hold on Gaza and the PA will never relinquish the West Bank. A (Palestinian) unity government will form only under extreme international pressure," he said.

The Shin Bet chief further recommended Israel refrain form handing over full security responsibilities to the Palestinian Authority at this time.

Covering Egypt's attempts to curb contraband smuggling from its territory into the Gaza Strip, Diskin said that "the Egyptians are making considerable efforts to curb smugglings… but then again Hamas is interested in maintaining peace in order to regain it strength and bolster its hold on the ground."

Friday saw the London-based Arabic-language newspaper al-Quds al-Arabi report that Egyptian security forces unearthed a weapons cache on the border with Israel.

According to the report, the cache contained 266 rockets, three anti-aircraft missiles, 43 landmines, 51 shells and 21 grenades.