"I would suggest that as a state we should not act like terrorists," Halutz told Israeli TV Channel 2 from the southern Israeli city of Sderot. "Overreacting is not a modus operandi."
But he warned, "At a certain point, our patience will wear thin, but I would suggest that we decide when."
Halutz hinted that Palestinian leader Mahmoud Abbas' recent decision to postpone the parliamentary election, contrary to agreements he had reached with major factions, be the motive behind the latest escalation of violence.
Two Palestinian workers and one Chinese worker were killed and five others wounded Tuesday afternoon in a mortar attack on hothouses in the Gaza Strip settlement bloc of Gush Katif, shaking a fragile ceasefire declared by Israeli and Palestinian leaders in February.
The Islamic Jihad (Holy War) claimed responsibility for the attack, Israel Radio reported.
Earlier in the day, a Jihad commander in the West Bank and an unarmed Palestinian policeman were shot dead in clashes with IDF troops near the West Bank city of Jenin, while Hamas fired several homemade Qassam rockets at Sderot.
Attacks on Israeli targets have dropped sharply as major Palestinian militant groups including Hamas and Islamic Jihad agreed to abide by the truce till the year end. But the fragile peace has been shaken by sporadic violence.