Reports say at least 100 people will be allowed in.
The fighting has drawn international calls for restraint, with UN Secretary General Ban Ki-moon urging both sides to halt the violence.
But Israeli Defence Minister Ehud Barak said his country needed to prepare for an escalation of its air and ground operations in Gaza.
'Pointless' talks
Rocket attacks on Israel have continued despite the assault on Gaza.
He added that about 50 rockets were falling on the town each day. One Israeli died in an attack earlier this week.
Palestinian rockets have reached as far as the Israeli town Ashkelon, 16km (10 miles) from the Gaza Strip.
Mr Abbas' spokesman, Nabil Abu Rudeina, blamed Israel for the suspension of talks on all levels.
"In light of the Israeli aggression such communication has no meaning," he said.
A spokesman for Israel's Foreign Minister Tzipi Livni, Arye Mekel, told Reuters news agency the Palestinian decision was a mistake, and expressed hope that negotiations would resume.
West Bank clashes
Mr Abbas restarted the talks after a conference in November in the US city of Annapolis.
US Secretary of State Condoleezza Rice is due to visit the region in a few days.
Fighting continued in the Gaza Strip on Sunday, with Israeli troops operating in the northern town of Jabaliya for a second day.
The offices of Ismail Haniya, a senior Hamas leader in Gaza City, were destroyed in an air attack that killed five people overnight.
Sporadic gunfire is continuing around Gaza, as funerals are held across the territory.
There have also been clashes in the West Bank.
A Palestinian teenager was killed in Hebron as troops responded to stone-throwing youths with rubber bullets and tear gas.
Other protests were held in Nablus, Ramallah and Bethlehem, AFP news agency reported.