GAZA CITY, Gaza Strip (AP) – Israel on Thursday delayed a planned ground invasion of northern Gaza, possibly signaling diplomatic developments in its effort to win the release of a soldier held by gunmen affiliated with the Palestinians’ ruling Hamas party.

Late in the day, Palestinian officials said Israeli artillery fire hit the electric distribution network in northern Gaza, plunging some areas into darkness and wounding two security officers. The Israeli army said it had been firing artillery at open spaces in the area at the time.

Israel earlier rounded up dozens of Hamas Cabinet ministers and lawmakers, while pressing ahead with the military campaign in Gaza it launched Wednesday in response to the capture of Cpl. Gilad Shalit.

One of the militant groups that seized Shalit said it had killed an 18-year-old Jewish settler, whose body was found buried in the West Bank with a gunshot wound to the head.

Israel has focused its incursion so far on southern Gaza, where the military thinks the 19-year-old Shalit is being held. It dropped leaflets over northern Gaza on Wednesday night, warning of an impending incursion.

On Thursday, security officials said the invasion had been delayed.

At a meeting of security officials, Defense Minister Amir Peretz said significant diplomatic developments were possible, but did not indicate whether there had been a breakthrough, they said. They spoke on condition of anonymity because they weren’t authorized to discuss policy with the media.

Other government officials said a decision had been made to give diplomatic efforts more time _ in part to defuse possible international criticism of a broad ground campaign in Gaza.

There has been no sign of life from Shalit since gunmen seized him Sunday during an attack on an Israeli military post near Gaza. His capture and Israel’s subsequent military incursion into Gaza threatened to bring the two sides to the verge of all-out war.

While a ground invasion in the north was put on hold, Israeli aircraft pounded suspected weapons factories, militant training camps and empty areas in southern Gaza, and heavy artillery fire from southern Israel exploded in the north.

Aircraft also went after a car that witnesses said was carrying an Islamic Jihad activist, but the militant escaped before the missile struck.

No deaths or serious injuries have been reported in any of the attacks since the operation began.

Several miles away, Palestinian militants blew a hole in a wall near the border with Egypt. Security personnel on both sides of the border kept people from streaming across and Palestinian police later resealed the wall with bricks and cement.

Even after taking power in March, Hamas has continued to refuse to renounce violence and recognize Israel. Israel said the arrests of its officials Thursday was intended to undercut the group’s ability to carry out attacks.

The Israeli military said 64 Hamas officials, including the deputy prime minister, were arrested in the early-morning raid in the West Bank. In all, eight of Hamas’ 23 Cabinet ministers and 20 of its 72 lawmakers were rounded up, Israeli and Palestinian officials said.

Israeli Foreign Ministry spokesman Mark Regev said the officials were not taken as bargaining chips for Shalit’s release, but because Israel holds Hamas responsible for attacks against it.

“The arrests of these Hamas officials … is part of a campaign against a terrorist organization that has escalated its war of terror against Israeli civilians,” Regev said.

When asked if the Hamas officials would be freed if Shalit were released, Maj. Gen. Yair Naveh, the head of Israel’s central command, saw a direct link.

“I think so,” Naveh said. “The decision to arrest them came from the political level … and I think the political level’s perspective could change” if Shalit were to be freed, he said.

Asked if more arrests were in the offing, Naveh replied, “The dam has been broken on this. … We won’t favor anyone and we will act against in the future.”

Regev urged the Palestinian leadership to release Shalit to “avert this crisis.”

“We have a responsibility as the government of Israel to all our young people doing national service, those young men and women, that if they’re ever taken hostage, we as a government will do everything we can to bring about their release,” Regev told CNN.

Palestinians were outraged by the arrests.

“We have no government, we have nothing. They have all been taken,” said Saeb Erekat, an ally of the moderate Palestinian president, Mahmoud Abbas. “This is absolutely unacceptable and we demand their release immediately.”

The Popular Resistance Committees _ one of the groups holding the soldier_ provided no information on Shalit in a new statement, but insisted on swapping him for Palestinian prisoners held in Israeli jails.

“Today, tomorrow or after that, there will be no option but to give in, and admit to the right of our prisoners to freedom, and our people’s right to an honorable living. Wasting time is not in their interests and for sure, they are the losers,” said Abu Mujahid, a spokesman for the group.

Israel has said it would not negotiate Shalit’s release and has rejected militants’ demands to free Palestinian prisoners in exchange for information about him.

Separately, the PRC said it killed Eliahu Asheri, kidnapped in the West Bank. An Israeli military official said he was shot in the head shortly after being abducted Sunday.

Government spokesman Asaf Shariv said Asheri’s killers would be arrested, and Israel would try to bring them to trial. “Their days as free people are numbered,” Shariv said.

Although the Israeli military campaign against Gaza was touched off by Shalit’s capture, Israeli Prime Minister Ehud Olmert’s government has also been alarmed by a surge in the number of homemade rockets fired on Israeli communities bordering Gaza.

Israeli warplanes, tanks and thousands of troops began moving into southern Gaza overnight Tuesday, knocking out Gaza’s only power station, making main roads impassable and bombarding the strip with heavy artillery fire.

On Thursday, Israeli aircraft aimed a missile at a car carrying Palestinian militants, the military said, but Islamic Jihad activist Majdi al Dahdouh jumped out of the car before the missile struck and escaped, witnesses said.

Residents said an Israeli Apache helicopter fired a missile at an electrical appliances store near the southern town of Khan Younis before daybreak. Inside, computers, refrigerators and other appliances were charred, but Israel said it struck a weapons manufacturing and storage facility.

Farmer Nabil Abu Muammar, 39, said his home and farmland were razed after residents near Gaza’s southern tip were warned over loudspeakers to leave the area. Other homes and fields in the area were also flattened.

The military denied flattening homes or farmland, and it wasn’t immediately possible to reconcile the two accounts.

Israeli aircraft also struck two militants’ training camps in southern Gaza, witnesses said.

Olmert has threatened harsher action to free Shalit, but said there was no plan to reoccupy Gaza, which Israel evacuated last summer.