Israeli Prime Minister Mr Ariel Sharon has rejected his army's request to scale back its Gaza offensive.
He is seeking to avoid any show of weakness after deadly bombings hit Egyptian resorts crowded with Israelis, security sources said.
Mr Sharon decided a pullout from the besieged Jabalya refugee camp would encourage Palestinian militants to resume rocket fire into Israel and "send the wrong message" so soon after the Sinai bombings, a source said today.
Mr Sharon's order to keep up the massive 12-day-old campaign also appeared aimed at mollifying hardliners before a parliamentary speech today in which he will try to soften opposition to his plan to evacuate Gaza settlements next year.
If Mr Sharon brings his "disengagement" plan to its first vote in parliament in coming weeks as he has promised, a key far-right coalition partner could desert, forcing him to reshape his government or call early elections.
Israel has killed 92 Palestinians since sending tanks into northern Gaza, including Jabalya, a militant stronghold, after a Hamas rocket attack killed two toddlers in southern Israel. Three Israelis have also died since the raid began.
Despite low-key US pressure to end the operation, Mr Sharon ordered the army to press on, saying leaving Jabalya at this point could spur militants to resume the firing of makeshift missiles into the Jewish state.