Jerusalem ? Israeli Prime Minister Ehud Olmert signaled Thursday that Israel has no plans for a massive military operation in Gaza to try to stop deadly Palestinian rocket fire, easing fears of a new spasm of violence that could derail tentative progress toward getting Israelis and Palestinians talking again.

European nations, seeking a bigger role in ending the conflict, unveiled a new Mideast peace initiative calling for peace talks, a prisoner swap and the stationing of peacekeepers on the Israel-Gaza border.

“We cannot remain impassive in the face of the horror that continues to unfold before our eyes,” Spanish Prime Minister Jose Luis Rodriguez Zapatero said as he and French President Jacques Chirac presented the plan in Gerona, Spain.

Olmert’s message of restraint could bolster Palestinian pragmatists as they try to forge a more moderate government open to negotiating with Israel.

Those calling for a broad, crushing offensive “need to remember that the terrorism will never end altogether,” the Haaretz newspaper Web site quoted Olmert as telling reporters on his return flight from a five-day trip to the U.S.

Olmert broadcast moderation as Palestinian President Mahmoud Abbas of the pragmatist Fatah Party made his way back to Gaza on Thursday to resume coalition talks with Prime Minister Ismail Haniyeh, who heads the current Hamas-led government.