Egyptian and Hamas officials expressed optimism that an agreement for a temporary halt in fighting could be sealed soon and presented to Israel. But even if all sides sign on, further talks will be needed to resolve contentious disputes over policing Gaza's borders and ensure a longer-term truce.
"We're working with Hamas and we're working with the Israeli side. We hope to reach an outcome soon," Egyptian Foreign Ministry spokesman Hossam Zaki told the British Broadcasting Corporation.
Egyptian and Hamas officials held intensive talks in the Egyptian capital, trying to finalise the deal. Late on Wednesday, Salah al-Bardawil, a Gaza-based Hamas official, stopped short of saying Hamas had accepted the Egyptian proposal. He told reporters in Cairo that "we submitted our points of view" on the proposed deal, adding, "we hope that this Egyptian effort will succeed."
Ghazi Hamad, another Gaza-based Hamas official, told BBC, "I am optimistic now because I think there is no other choice for us ... This kind of agreement can be done now, and I think now there is good progress in Egypt. We hope that now Egypt will contact Israel and talk about all issues."
But there were signs Hamas' leadership-in-exile had reservations. Osama Hamdan, a leading Hamas official in Beirut, said there were still points that Hamas had not agreed to.
"We do not agree with the initiative as it stands now," he told Al-Jazeera television.
The contradictory comments were the latest sign of some cracks between Hamas leaders under fire in Gaza and the leadership-in-exile, which is largely based in Damascus and is seen by many as more hard-line. Hamas officials, however, insist that the movement is unified, and it was not clear if Hamdan's tougher tone was a negotiating tactic or a sign of division.
Israel launched its offensive on December 27 to halt years of Palestinian rocket attacks. It has said it will press forward until Hamas halts the rocket fire and it receives guarantees that Hamas will stop smuggling weapons into Gaza through the porous Egyptian border.
The offensive has killed 1,017 Palestinians, nearly half of them civilians, and wounded more than 4,500, according to the Palestinian Health Ministry. The toll included 11 Palestinians killed on Wednesday, medical officials said. Thirteen Israelis have also been killed since the offensive began, four by rocket fire from Gaza.
Under the Egyptian proposal, Hamas would back off its demand that Israeli troops withdraw from Gaza and borders be opened immediately as part of any halt in fighting.
Instead, Israeli forces would remain in place during a 10-day cease-fire until details on border security are worked out, Egyptian and Palestinian officials close to the talks said. They spoke on condition of anonymity to provide details of the closed-door negotiations.
Prime Minister Ehud Olmert met late on Wednesday with Defence Minister Ehud Barak and Foreign Minister Tzipi Livni to discuss the cease-fire efforts.
In a sign of progress, Israel's chief negotiator, Amos Gilad, planned to fly to Egypt on Thursday to present Israel's stance, a senior defence official said. Gilad had put off the trip in recent days, saying the time was not yet ripe.
A senior Israeli official said it was far from certain that Israel would accept the deal. He said Israel welcomed many parts of the plan, but is concerned that Hamas will not respect a cease-fire as long as troops are in Gaza. The Israeli officials spoke on condition of anonymity because they were not authorised to talk to the press.
Israel has made clear that the Cairo talks are key to determining whether it widens its offensive to send thousands of reservists into crowded, urban areas where casualties on both sides would likely mount.
Israeli leaders signalled that they have crippled Hamas to their satisfaction after 19 days of heavy bombardment and ground fighting, but were holding out for international guarantees that weapons would no longer be smuggled into Gaza.
On Wednesday, Israel showed no signs of slowing its bruising offensive, striking some 60 targets. One airstrike hit an overcrowded cemetery, spreading body parts and rotting flesh over a wide area. The army said the airstrike targeted a weapons cache hidden near the graveyard.
Guerrillas in Lebanon sent rockets crashing into northern Israel on Wednesday for the second time in a week, drawing an Israeli artillery barrage and threatening to drag the Jewish state into a second front.
The rocket fire in the north caused no injuries, but sent residents scurrying to bomb shelters. There was no immediate claim of responsibility, and speculation focused on small Palestinian groups. Hezbollah, the Iranian-backed guerrilla group that fought a monthlong war with Israel in 2006, denied involvement in last week's attack.
In a web audiotape Wednesday, al-Qaida leader Osama bin Laden urged Muslims to launch a holy war against Israel. Iran's top leader, Ayatollah Ali Khamenei, issued a religious opinion, or fatwa, declaring the purchase of any Israeli goods or trade with Israeli companies to be forbidden.
UN secretary-general Ban Ki-moon opened a visit to the Mideast on Wednesday, urging an immediate halt to the violence.
"It is intolerable that civilians bear the brunt of this conflict," he said in Cairo after talks with Egyptian President Hosni Mubarak.
"Negotiations need to be intensified to provide arrangements and guarantees in order to sustain an endurable cease-fire and calm."
Ban is scheduled to arrive in Israel on Thursday. He will also visit Jordan, the Palestinian-controlled West Bank, Turkey, Lebanon, Syria and Kuwait. His itinerary does not include a stop in Gaza because of the ongoing conflict.
If a cease-fire is reached, it would aim to give 10 days of quiet to work out the contentious issues of a longer truce, according to the framework outlined by the Egyptian and Palestinian officials close to the talks.
During that time, Egyptian, Turkish and other international mediators would try to negotiate an arrangement for policing Gaza's borders - particularly those with Egypt - to prevent weapons smuggling into the territory, the officials said.
This would likely entail some kind of international monitors on the Palestinian side of the border - but the two sides remain far apart on who would make up the force, where they would be deployed and their mission.
Hamas has so far publicly resisted deploying international monitors and has demanded a role in policing the crossings and borders. Israel - like the United States, the EU and other nations - considers Hamas a terrorist group and has always rejected a role for it policing the crossings.
Only after a deal on border security has been reached would the crossings be opened and Israel would withdraw its forces from Gaza, as Hamas has demanded, the officials said.
Egyptian Foreign Minister Ahmed Aboul Gheit underlined that all the elements most fall into place - the cease-fire, the security arrangements, and the eventual opening of border crossings and Israeli withdrawal. Otherwise, "we will end up with a truce but without reconciliation or with a truce that will be broken," he told reporters in Cairo.
Maj. Avital Leibovich, an Israeli military spokeswoman, said the army has made significant inroads against Hamas. She said Israel has destroyed 60 to 70% of the smuggling tunnels along the Egyptian border - Hamas' main lifeline for bringing weapons into the territory.
She also said Israel has reduced Hamas' rocket capabilities by 90%, from about 200 a day before the offensive to 20 or 30 each day. Twelve rockets were fired at Israel on Wednesday.
