Israel said it was approaching the "endgame" of its three-week offensive against Gaza's Hamas rulers and scheduled a Security Cabinet vote Saturday on a truce proposed by Egypt.
Under the cease-fire plan, fighting would stop immediately for 10 days, but Israeli forces would initially remain in Gaza and the border crossings into the territory would remain closed until security arrangements are made to ensure Hamas militants do not rearm.
If Israel agrees to stop shooting, Israel radio said a truce summit would be held in Cairo Sunday with U.N. Secretary-General Ban Ki-moon and Israeli leaders expected to attend.
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Hamas' political chief rejected Israel's conditions, but negotiators for the Islamic militant group were in behind-the-scenes contact with mediators in Cairo and signaled it was time for a truce.
"If they are ready, we are ready," Osama Hamdan, a top Hamas figure, told Sky News.
Israel launched its military offensive Dec. 27 to try to halt Hamas rocket attacks on southern Israel, and top envoys were in Cairo and Washington on Friday to discuss cease-fire terms.
Palestinian medics say the fighting has killed at least 1,140 Palestinians and Israel's bombing campaign caused massive destruction in the Gaza Strip. Thirteen Israelis have been killed, four by rocket fire, according to Israel.
The Israeli vote was scheduled hours after the U.S. paved the way by agreeing to provide assurances that Hamas will not be able to rearm if Israel approves a cease-fire. It comes ahead of President-elect Barack Obama's inauguration on Tuesday, and Israeli elections next month.
A senior Israeli official said a vote approving the truce would amount to a "unilateral" cease-fire, though Israeli forces would only leave Gaza after an official declaration that the fighting was over. He spoke on condition of anonymity because he was not authorized to release the information.
A truce would begin a phased process in which Israel halts its military offensive and then gauges the reaction from Hamas militants, the official said. If the militants continue to fire rockets, the assault would resume.
Under the deal, Egypt would shut down weapons smuggling routes with international help, and discussions on opening Gaza's blockaded border crossings would take place at a later date.
U.N. spokeswoman Michele Montas said Ban, who had weekend visits planned to Lebanon and Syria, was considering whether to attend a summit in Cairo Sunday, adding: "There's been no decision yet."
Israeli leaders were also considering whether to attend the summit, the senior Israeli official said.
The diplomatic developments coincided with an easing of violence in Gaza, where Israeli assaults killed 14 Palestinians on Friday, a lower death toll than in recent days. Palestinian medics took advantage of the relative calm, digging out 25 bodies buried under rubble in areas where Israeli forces and militants had clashed.
Palestinians heard dozens of Israeli tanks and other military vehicles roll away from the eastern and southern edges of Gaza City. An Israeli security official said the tanks would redeploy and were not withdrawing. He spoke on condition of anonymity because he was not authorized to speak to the media.
Israeli envoy Amos Gilad returned from Cairo and reported "substantial progress" in truce talks with Egyptian mediators, said a statement from the office of Prime Minister Ehud Olmert.
"I hope we are entering the endgame and that our goal of sustained and durable quiet in the south is about to be attained," Israeli government spokesman Mark Regev said.
In Washington, Secretary of State Condoleezza Rice and Israeli Foreign Minister Tzipi Livni signed an agreement intended to prevent Hamas from smuggling weapons into Gaza if a cease-fire is implemented.
Livni described the deal as "vital ... for a cessation of hostility" and said it was meant "to complement Egyptian actions and to end of the flow of weapons to Gaza."
Earlier, Rice said she hoped European countries would work out similar bilateral agreements with Israel.
"There are a number of conditions that need to be obtained if a cease-fire is to be durable," Rice said. "Among them is to do something about the weapons smuggling and the potential for resupply of Hamas from other places, including from Iran."
The agreement outlines a framework under which the United States commits detection and surveillance equipment, as well as logistical help and training to Israel, Egypt and other nations to be used in monitoring Gaza's land and sea borders.
Rice and State Department spokesman Sean McCormack said Obama and Secretary of State-designate Hillary Rodham Clinton had been consulted on the details of the document, which was concluded after frenetic negotiations to address Israeli concerns that Hamas would use a cease-fire to stock up on weapons.
A diplomat on the U.N. Security Council in New York said he was reasonably optimistic that "we are in the last leg of the negotiations," though some issues remain unresolved.
There were long discussions on border security because the Egyptians don't want any kind of international presence on their side of the border, said the diplomat, who spoke on condition of anonymity because the negotiations are being held behind closed doors.
"Everything has to be on the other side of the border, which means there's a problem of who will be there, not only on behalf of the international community, but also which Palestinians. So it's linked to a potential agreement between Hamas and the Palestinian Authority — so it's linked to other discussions," the diplomat said.
In addition, he said, discussions were under way with the U.S. on technology to help locate and destroy the tunnels Hamas has used to smuggle in weapons.
In Gaza, residents said they would welcome an end to the fighting, but expressed skepticism a cease-fire can hold.
"Everybody wants the world to return to what it was. But I think it's empty words," said Ghadir Mohammed, who was forced to flee her Gaza City home because of the fighting. "Let's assume if Hamas fires a rocket, will they be quiet about it? Israel isn't the kind to be quiet."
Hiba Dahshan from the eastern Gaza City neighborhood of Zeitoun where some of the heaviest fighting has taken place, said: "We are exhausted. We need a solution. Hopefully they'll halt fire."
A resident of the southern Israeli city of Ashkelon, which has been targeted by Hamas rockets, said the army needed to free Israeli soldier Gilad Schalit — abducted by Hamas in 2006 — and be sure there would be quiet in southern Israel before stopping the fight.
"For eight years, they have been shooting at us," said Yigal Hakmon, manager of a convenience store. "We can't stop in the middle. We have to finish. We have to kill all the Hamas people."
Hamas, which has controlled the tiny Mediterranean strip since 2007, has demanded an immediate Israeli withdrawal from Gaza and the opening of blockaded border crossings.
Mohamed Nazzal, a Hamas official based in Damascus, said the Egyptians invited Hamas on Friday for more discussions.
"It is expected that we go to see what is the opinion of the Israelis on the Hamas propositions," Nazzal said.
The Syrian-based Hamas chief Khaled Mashaal took a hard line at a summit of Arab countries in the Qatari capital of Doha, asking them to cut off any ties with Israel.
"We will not accept Israel's conditions for a cease-fire," Mashaal told the summit. He said Hamas demands that "the aggression stop," Israeli troops withdraw and crossings into Gaza open immediately.
Qatar and Mauritania heeded Mashaal's call, suspending political and economic contacts with Israel to protest the fighting. Qatar does not have diplomatic relations with Israel but maintains lower-level ties; Mauritania has full relations, but Israel's embassy in Mauritania was to remain and its ambassador was not being expelled.