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Senior Islamic Jihad leader Mohammed al-Hindi said Friday that Israel would have to agree to the group's conditions, such as stopping attacks and raids and freeing Palestinian prisoners, before it would consider halting attacks against Israelis.

"We have said clearly and frankly that no cards can be given free for the Zionist enemy," he said. "Sharon wants to withdraw from Gaza in calm. If he wants calm, he has to pay the price."

The militant group denied reports earlier Friday that it had agreed in principle with Palestinian Authority President Mahmoud Abbas to a ceasefire.

Haaretz reported Wednesday Abbas and Islamic Jihad were close to striking a deal, and a Channel 10 report on Friday reinforced the claims, which leaders of the militant group vehemently denied.

Abu Abdullah, a leader of the group's military wing, said the report was "false."

"Talks are still underway between us and Mr. Mahmoud Abbas," Abu Abdullah said.

Nafez Azzam, the top Islamic Jihad leader in Gaza, said the Israeli television was "not accurate."

Meanwhile, Egypt will likely host a high-level meeting in Cairo in the coming days with Palestinian officials and Hamas leaders to finalize an agreement that could lead to a cease-fire, an official said Friday.

The Palestinian official, who spoke on condition of anonymity, refused to give details from the latest round of talks between Palestinian leader Mahmoud Abbas and Hamas leaders in Gaza. He said the talks are moving in a "positive direction."

Abbas has been holding talks in Gaza since Tuesday in an attempt to reach a truce with militant groups, including Hamas and Islamic Jihad. A halt in the violence could help renew long-stalled Israeli-Palestinian peace talks.

Hamas has distributed a document outlining a joint Palestinian leadership program in which the organization, for the first time in its existence, unequivocally recognizes the 1967 borders and adopts the main principle guiding Fatah: the establishment of a Palestinian state with Jerusalem as its capital.