Israeli Prime Minister Ehud Olmert, Palestinian Authority President Mahmoud Abbas and Egyptian President Hosni Mubarak may sign an agreement as early as Sunday that could underpin a proposed truce between Israel and Hamas in the Gaza Strip, Western officials said on Friday.
It was not immediately clear what that agreement would entail since Israel and Hamas have yet to settle their differences over the terms of a ceasefire in Gaza.
Western officials, speaking on condition of anonymity, said it would likely include security arrangements for Gaza's borders with Egypt and Israel. Both countries want Abbas and his forces to reassert control at key crossings.
Egyptian officials told Olmert that a signing ceremony could take place on Sunday, but Israel responded that it was premature to commit to that date since Hamas and Israel have yet to agree on the terms of a truce, Israeli sources said.
Israeli sources, meantime, said that Israeli leaders are seriously considering a unilateral halt to their offensive in the Gaza Strip instead of entering into a formal, Egyptian-brokered ceasefire with Hamas.
Such a move could deprive Hamas of political gains from a truce deal that would include the easing of Israel's blockade on the Palestinian territory.
Israel said that its three-week-old assault on the Gaza Strip could be entering its "final act" as it continued its deadly blitz on the impoverished enclave while Hamas proposed a conditional truce on day 21 of a war that has killed at least 1,145 Palestinians and wounded more than 5,100 others.
On the Israeli side, 10 soldiers and three civilians have been killed as a result of combat or rocket fire.
Israel has rebuffed some of the conditions set by Hamas for a ceasefire in the Gaza Strip, including how long it will last and who will manage the border crossings, Israeli and Western sources said on Friday.
Hamas will send a delegation to Cairo later on Friday to discuss Egyptian efforts to mediate a ceasefire in Gaza, a Hamas official said.
Hamas member Mohammed Nasr said that Hamas had given its specific views on the Egyptian initiative during the last visit and had received a call on Friday inviting a delegation to Egypt to discuss the Israeli response.
Israeli defense official Amos Gilad left Cairo earlier after the latest round of talks on Egypt's proposal for a truce in the Jewish state's conflict with Hamas, with a diplomatic source saying there was still no formal agreement on a truce.
There will be a slackening in negotiations until Saturday or Sunday," said the diplomatic source, who is close to the negotiations aimed at ending the offensive. "There is no formal agreement."
Shelled and besieged from air, ground and sea, Hamas offered a year-long, renewable ceasefire under which the Jewish state would withdraw its troops within a week and all Gaza's border crossings would open immediately.
Hamas's Damascus-based leader Khaled Meshaal reiterated his group's demands: "First, the aggression must stop; second, the Israeli forces must withdraw from Gaza...immediately, of course; thirdly, the siege must be lifted and fourth we want all crossing-points reopened, first of which is Rafah (Egypt)."
Panic on the ground
A day after Israeli raids set landmark buildings ablaze in Gaza's main city, the military pummeled the territory with some 40 overnight airstrikes on tunnels and a mosque allegedly used as a weapons store, the army said.
An Israeli tank shelling the home of a Hamas militant killed his wife and five children in the central Gaza Strip, medical officials said.
The officials said Israel had apparently targeted the home of a Hamas militant near al-Bureij refugee camp. He was not there at the time, they said.
In the pre-dawn hours, Israeli tanks withdrew from the Gaza City neighborhood of Tal al-Hawa, where clashes the previous day leveled parts of the residential area and set a hospital ablaze.
Medics rushed into the area, the site of furious clashes between Israeli troops and Palestinian fighters that sent hundreds of terrified civilians fleeing for safety.
Many sought shelter at the al-Quds Hospital in the neighborhood, but the building was engulfed in flames after Hamas and Israeli troops fought pitched battles for 12 hours a few hundred meters (yards) from the medical facility.
In scenes of utter panic, patients who had been wounded could be seen struggling to get out of their beds to head outside into a cold night where clashes raged.
Babies in incubators and people on life support were wheeled out of the Al-Quds hospital into the flame-lit streets.
The army locked down the occupied West Bank for 48 hours after Hamas called for a day of "wrath" against the attack on Gaza that on Thursday saw one of its top leaders, interior minister Said Siam, killed in an air strike.
Hamas fighters fired two rockets into fields in Western Negev Friday morning and hit an agricultural structure in retaliation to Israel's latest assault. The rockets landed in an agricultural area and caused no injuries or damage.
Diplomats have spoken with growing confidence that some kind of ceasefire will be arranged in the coming days and suggested that the deadly attacks on Thursday were because Israel had been making a last push before a deal was brokered -- possibly in time for the inauguration of the new U.S. president Barack Obama on Monday.
Livni traveled to Washington, where she signed a U.S.-Israeli agreement on measures aimed at preventing arms smuggling into Gaza, hoping to bring a truce closer.
Olmert's office said U.S. Secretary of State Condoleezza Rice told him "the United States would be prepared to assist in solving the issue of smuggling".