Israel gave the Palestinians a list of 300 suspected terrorists it wants arrested. These are the men that Israeli commandos have been going after. Israel is making demands like this rather than launching a military strike in retribution for the June 1st bombing. The military attack is on hold, not canceled. Meanwhile, the Hamas announcement that it will continue it's attacks is seen more as a publicity move to embarrass the Palestinian Authority. Hamas knows that an actual resumption of attacks would put pressure on Arafat to crack down on Hamas. This could lead to a civil war among Palestinians, which would not help the Palestinians, but would aid Israel.