Israel began scaling back its forces in Gaza on Saturday.
It also pulled out of cease-fire negotiations and warned that plugging up Hamas militants' cross-border tunnels is not the end of their military's mission.
Rather than trying to end the 26-day-old operation, the latest move appears to be part of plans to regroup as Israel's leadership, divided over how to deal with Hamas, decides its next step.
Israel's initial goal was to destroy some 30 Hamas guerrilla tunnels but Israeli Prime Minister Benjamin Netanyahu said the military will prepare for continued action according to the country's security needs.
Meanwhile, Hamas has refused to back down, vowing to continue its offensive against Israeli forces.
The on-going clash has so far resulted in over 16-hundred Palestinian deaths and broken promises of a truce.