The official spoke on condition of anonymity because he was not authorized to brief reporters.

On Thursday, footage filmed by Associated Press Television News showed one smuggler cutting through the barrier with a blow torch.

Smugglers say the wall was never a serious obstacle and that they are more concerned about consumer goods coming in through legitimate crossings now that Israel has eased the Gaza closure.

Hundreds of tunnels run under the border. They are used to import goods as well as weapons to the besieged territory. Last year, Egypt started building the wall to stop smuggling.

On the political front, Palestinian President Mahmoud Abbas said Thursday he would decide in the next seven days whether conditions are now ripe to proceed to face-to-face peace talks with Israel.

Abbas says he has a promise from Washington that if he agrees to direct negotiations, Israel would prolong a partial moratorium on West Bank settlement building that is due to expire in September.

But he wants to know in advance what shape and size of a future Palestinian state Israel is prepared to discuss in direct negotiations, and whether it is ready to quit the Jordan Valley and entrust security there to a third party.

Abbas also seeks clearer assurances from the United States. "We are not against direct negotiations," he told reporters in Ramallah after publication of a closed-door speech to his Fatah movement outlining slow progress so far in indirect negotiations mediated by US envoy George Mitchell.

"If there is progress by July 28, we will present it to the Arab League. If there is no progress, we will tell the League that we will continue with the proximity talks until the end of the four-month mandate we received," Abbas said.

The Arab League committee that approved the indirect talks is due to convene in Cairo on July 29.

In a message relayed by Mitchell, US President Barack Obama said that if the Palestinians went to direct negotiations, the so-called moratorium would be extended and "no single house would be built on Palestinian land during the extension", Abbas told Fatah's Revolutionary Council.

Israeli Prime Minister Benjamin Netanyahu has voiced reluctance to extend the 10-month freeze, a move that could put strains on his governing coalition, which is dominated by pro-settler parties, including his own.