Israeli and Palestinian officials were in Cairo for the Wednesday talks aimed at extending the ceasefire, with limited expectations that a long-term resolution might be reached.

The Palestinian delegation included representatives of the Palestinian Authority, Hamas and Islamic Jihad, with the lifting of an eight-year blockade on Gaza expected to be one of the side's key demands. Israel, meanwhile, was expected to push for a full demilitarization of the Gaza Strip.

Egyptian officials were expected to shuttle between the two delegations. So far, both sides have steadfastly refused to concede to the other's demands.

The Egyptian news agency MENA said Egypt's intelligence chief met a Palestinian delegation in Cairo, a day after he conferred with Israeli representatives.

The Palestinian team, led by an official from Western-backed President Mahmoud Abbas's Fatah party, included envoys from Hamas and the Islamic Jihad group, it said.

The US was also set to participate in the talks, although the State Department said it was still unclear to what level and capacity.

Jordan on Tuesday circulated a fresh United Nations resolution calling for a full investigation into the Israeli bombardment of UN-run schools in Gaza, where civilians fleeing the fighting had been sheltering. Jordan' ambassador Dina Kawar said the draft resolution's main purpose was making the 72-hour cessation of hostilities permanent.

Longest lull so far

The present truce, which began early on Tuesday, is the longest to hold since fighting - which has claimed the lives of some 1,875 Palestinians and 67 Israelis - began on July 8. A previous ceasefire, on August 1, lasted just 90 minutes.

On this occasion, Israel has withdrawn its troops and ended a ground operation aimed at destroying tunnels used by Hamas to launch raids into Israel.

The lull in fighting has been used as an opportunity to assess the full impact of the violence, including the economic damage. Palestinian Deputy Economy Minister claimed the 29-day conflict had caused an estimated $6 billion (4.5 billion euros) of damage, with much of the southern city of Rafah having been flattened.

Norway is expected to organize a donor conference to pay for reconstruction, with Palestinian President Mahmoud Abbas expected to oversee the rebuilding and reassert his authority in Gaza, which Hamas took control of in 2007.

rc/hc,ipj (AFP, AP, dpa, Reuters)