"Hamas' situation is bad," Shimon Peres told Israel Radio.
The economic situation in Gaza remains difficult, chaos is ongoing and the governance in Gaza is being carried out through "a rule of gangs," Peres said.
"We are talking about a war of nerves," said Peres, "and Israel has strong nerves."
Hamas leader-in-exile Khaled Mashaal Friday said Hamas would stop firing Qassam rockets at Israel if Israel stopped targeting members of its armed wing, the Jerusalem Post reported Saturday.
A Hamas spokesman, however, reiterated Hamas was not observing any cease-fire with Israel.
Hamas spokesman Fawzi Barhoum said the Qassam attacks are part of his group's strategy of armed resistance.