Israel's security cabinet was due to meet early on Tuesday to discuss the plan proposed by Cairo, despite opposition to any backing down from hardline nationalists within the government.

The Egyptian Foreign Ministry on Monday evening proposed a ceasefire initiative to take effect at 0600 UTC on Tuesday - although it is believed the deadline could be delayed. The terms include a ceasefire of all land, air and sea hostilities within 12 hours of that time, followed by negotiations between delegations from both sides in Cairo within 48 hours.

Leading Hamas member Ismail Haniyeh did confirm there was "diplomatic movement," but said that a final agreement must be reached to end an Israeli blockade on Gaza.

"The problem is not going back to the agreement on calm because we want this aggression to stop," Haniyeh told the Al Jazeera news network. "The siege must stop and Gaza people need to live in dignity."

The ceasefire proposal was welcomed by both the US and the Arab League. Arab foreign ministers who were gathered in Cairo for an extraordinary meeting on the crisis, demanded that "all parties concerned accept the Egyptian initiative" and commit to its terms.

'Deep discussions'

The US State Department said Kerry was "deeply involved in conversations" with Israeli Prime Minister Benjamin Netanyahu, Egyptian officials and the Palestinian President Mahmoud Abbas.

"We welcome Egypt's call for a ceasefire and hope this will lead to the restoration of calm as soon as possible," said State Department spokeswoman Jen Psaki.

Palestinian authorities said late on Monday that since the latest Israeli army and naval offensive began last week, the death toll in Gaza had mounted to 187, with more than 1,390 wounded.

The UN Office for the Coordination of Humanitarian Affairs has said it estimates as many as 80 per cent of the Palestinians killed in the attacks have been civilians. Israel says its attacks are targeted, but claims that Hamas is using civilians as human shields.

At least 17,000 people have fled their homes in northern Gaza, despite a warning by the Hamas leadership to "disobey and ignore" an Israeli call to evacuate the area for their own safety.

rc/crh (AP, AFP, dpa, Reuters)