The Deputy Prime Minister said he hoped the coalition would agree a “tougher approach” soon that would give the public confidence that Britain was not contributing to civilian casualties.
The comments, in his regular LBC radio phone-in, came amid an apparent stand-off between Tories and Liberal Democrats over the issue of export licences.
The Government has not been issuing new licences and launched a review of existing ones, but has so far stopped short of suspending them. Baroness Warsi criticised the policy when she dramatically resigned as a Foreign Office minister earlier this week.
Mr Clegg said: “Firstly, I think we must respect the criteria, the very strict criteria laid down in law, which govern the issuing of export licences for arms and military hardware and so on from us to all countries in the world, including to Israel.
“We must look at what has happened over the last several weeks in Gaza to see if those criteria were breached or not.
“If it is shown that those criteria have been breached, never mind suspending the licences, you would have to revoke them permanently.”
He went on: “We now have a truce, we now have a ceasefire. This is why we are discussing this at length within Government right now.
“I think it is crystal clear that it would be unacceptable to the British people and wholly wrong for us to do anything other than immediately suspend any existing licences if that ceasefire was to come to an end and violence was to break out again.”
In an interview with the Independent newspaper, the Lib Dem leader accused Tories of risking British influence in the Middle East by not being “forthright” toward the conflict.
“While Israel has every right to defend itself against the reprehensible use of rockets by Hamas to terrorise Israeli civilians, it is also in the long-term interests of Israel to replace sporadic military incursions into Gaza with a negotiated breakthrough between Israel and the Palestinian leadership.
“I have always believed the real act of political leadership is not the expression of military superiority, but the courage to reach out to sworn enemies in the name of lasting peace.
“Throughout this coalition Government, the Conservatives have adopted a less forthright approach to the Middle East conflict, in a way which I believe risks decreasing British influence in the region.”