JERUSALEM, May 12 (JTA) Israel´s decision to shelve an incursion into the Gaza Strip may provide an opening for diplomatic efforts to end the Israeli-Palestinian conflict. Prime Minister Ariel Sharon and Defense Minister Benjamin Ben-Eliezer decided Sunday to halt the operation, each claiming that leaks from Israeli army officers and Cabinet ministers had given Palestinian militants time to go underground. The operation was originally planned to retaliate for a suicide bombing last week in Rishon le-Zion that killed 15 Israelis and wounded 60 others. Ben-Eliezer stressed Sunday that Israel still has a plan to take steps against terrorists and is ready to implement the plan at the appropriate time. In the wake of Sunday´s decision, the Israeli army began releasing reservists who had been called up for the Gaza operation. There were several factors leading to the decision to halt the Gaza operation, political observers said. They cited diplomatic pressure particularly from the United States and disagreement in the military over the action. While the Israel Defense Force´s chief of staff, Lt. Gen. Shaul Mofaz, supported a massive operation, some senior military officers reportedly were concerned about heavy Israeli and Palestinian casualties. The offensive was also said to lack the kind of public consensus that was behind the recent anti-terror campaign in the West Bank. In addition, U.S. officials had reportedly warned Sharon that a massive operation in the Gaza Strip could hurt efforts to bring about reforms in the Palestinian Authority. One of the senior Palestinian officials whose name has come up as a possible successor to Palestinian Authority President Yasser Arafat is Mohammed Dahlan, the head of the Palestinian preventative security service in Gaza. A Gaza incursion would also break the fragile diplomatic momentum generated by the end of the standoff at Bethlehem´s Church of the Nativity, according to political observers. Israeli troops pulled out of Bethlehem last Friday, when the 38-day standoff at the church ended nonviolently. Thirteen Palestinian terror suspects were flown into Cyprus en route to other countries, while 26 others were sent to Gaza. E.U. envoy Miguel Moratinos said Saturday the 13 are "free men," who had come to Cyprus of their own accord, adding that they are not deportees. Israel says the 13, holed up with some 200 others in the church, were involved in numerous terrorist attacks against Israelis. Ben-Eliezer said Sunday that Israel plans to seek the extradition of the 13. After the siege ended last Friday, American and Israeli bomb disposal experts defused about 40 bombs left behind by the Palestinians. Priests and volunteers cleaned away the refuse. Some observers said an Israeli military operation in Gaza would draw an international outcry, costing Sharon any diplomatic credit he accrued during his visit last week to Washington. Meanwhile, three key Arab states reiterated their support for a recent Saudi peace proposal. On Saturday, the leaders of Egypt, Saudi Arabia and Syria called on Arabs to back the Saudi initiative, which calls for Israel to withdraw to the boundaries that existed before the 1967 Six-Day War in exchange for full diplomatic relations, normalized trade and security guarantees from Arab countries. In a statement issued Saturday at the end of talks in the Egyptian resort of Sharm el-Sheik, the leaders of the three countries said the land-for-peace initiative, approved in March at an Arab League meeting in Beirut, should provide a basic guideline for peace. The statement also denounced Israeli military attacks on Palestinians and called for international pressure to have Israel withdraw from the West Bank and Gaza. While the Israeli operation was shelved, there were still sporadic incidents of violence over the weekend. On Sunday, a Palestinian worker in Gaza allegedly shot dead his Israeli employer, Nissan Dollinger. Sunday´s attack occurred in the Jewish settlement of Rafiah Yam, in southern Gaza. The suspect was caught shortly after with a pistol in his possession. Israeli military officials said the army suspects the killing was politically motivated. In another development, two Israeli Arab sisters were arrested on suspicion of plotting a suicide bombing in Israel. Galilee residents Latifa and Bohaisa Sa´adi admitted during questioning to working with Palestinian terrorists from the West Bank.