Israeli leaders convened on Thursday to consider halting a Gaza offensive, possibly within hours, after US President Joe Biden called for a de-escalation of the fiercest hostilities in years.
The dominant Palestinian Islamist faction Hamas had predicted a truce by Friday. With Cairo mediating between the sides, an Egyptian security source said they had agreed in principle to cease fire but details needed to be worked out.
Rocket attacks by Hamas and allied Islamic Jihad resumed after an eight-hour pause on Thursday, as Israel continued shelling that it said aimed to destroy the factions' military capabilities and deter them from future confrontation after the current conflict.
After Prime Minister Benjamin Netanyahu convened his security cabinet, public broadcaster Kan said it would vote on a proposal to halt attacks unilaterally within 24 hours.
There was no immediate Israeli confirmation of the report.
Palestinian sources said Hamas and Islamic Jihad wanted any truce to be mutually binding and simultaneous, but Kan said Israel wanted to cease fire on its own terms.
Since the fighting began on May 10, health officials in Gaza say 232 Palestinians, including 65 children and 39 women, have been killed and more than 1,900 wounded in aerial bombardments. Israel says it has killed at least 160 combatants in Gaza.
Authorities put the death toll in Israel at 12, with hundreds of people treated for injuries in rocket attacks that have caused panic and sent people rushing into shelters.
Biden on Wednesday urged Netanyahu to seek "de-escalation" and a Hamas political official, Moussa Abu Marzouk, said he believed a ceasefire would be reached "within a day or two".
On Thursday, Biden discussed Gaza with Egyptian President Abdel Fattah al-Sisi and the White House said reports of moves toward a ceasefire were "encouraging".
U.N. spokesman Stephane Dujarric confirmed that U.N. Middle East Envoy Tor Wennesland is in Qatar, adding: We are actively engaged with all the relevant parties for an immediate ceasefire.
Israel carried out over a dozen air strikes on Gaza after midnight, targeting what it said was a weapons storage unit in the home of a Hamas official, and military infrastructure in the homes of other commanders from the group.
Hamas-run radio said a woman was killed and four children wounded in one attack on Khan Younis in southern Gaza. Witnesses said several main roads were also damaged in the air strikes.
In the Gaza City suburb of Sabra, Amira Esleem, 14, and three family members were wounded in one Israeli attack, which she said caused parts of their house to collapse.
"We were sitting on the sofa when a missile landed. There was heavy smoke and we couldn't see anything," she said from her hospital bed.
Nearly 450 buildings in Gaza have been destroyed or badly damaged, including six hospitals and nine health centres, the United Nations humanitarian agency has said. More than 52,000 people have fled their homes in Gaza, which is blockaded by Israel and Egypt.
Israelis living in areas frequently targeted by rocket fire began their workday on Thursday without the usual sound of warning sirens. But after an eight-hour break, the sirens blared again in southern Israel.
Israel said some 4,000 rockets have been launched at it from Gaza, some falling short and others shot down by its Iron Dome air defences.
Civilians on both sides are exhausted by fear and grief, the International Committee of the Red Cross said. "People in Gaza and Israel urgently need respite from non-stop hostilities," said Fabrizio Carboni, regional director for the Middle East.
Washington and several Middle East governments have sought an end to the violence through diplomacy. The U.N. General Assembly was due to meet on the conflict on Thursday, but it was not expected to take action.
The U.S. mission said it would not support a French call for a resolution in the 15-member U.N. Security Council, saying it believed such actions would undermine efforts to de-escalate violence.
Any ceasefire is unlikely to address the fundamental issues in the Israeli-Palestinian conflict.
An international peace process aimed at creating a Palestinian state free of Israeli occupation and guaranteeing Israel's security has been frozen since 2014.
Hamas, regarded by the West as a terrorist organisation, has not been part of the mainstream Palestine Liberation Organization's engagement with Israel, which led to interim peace deals in the 1990s and the establishment of limited Palestinian self-rule in the occupied West Bank.
Hamas began firing rockets on May 10 in retaliation for what it called Israeli rights abuses against Palestinians in Jerusalem during the Muslim holy month of Ramadan.
The rocket attacks followed Israeli police clashes with worshippers at al-Aqsa Mosque in Jerusalem and efforts by Israeli settlers to evict Palestinians from a neighbourhood in Israeli-annexed East Jerusalem.