Prime Minister Benjamin Netanyhau, Defense Minister Ehud Barak, and Foreign Minister Avigdor Lieberman met till 4 A.M. on Monday to discuss an Egyptian proposal for a cease-fire between Israel and Hamas.
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The three top ministers decided at the end of their meeting to allow more time for the international mediation efforts, led by Egypt.
An Israeli official said Netanyahu, Barak, and Lieberman were updated during their meeting by an Israel emissary who had just returned from hours-long talk with Egyptian general intelligence officials. "The deliberations centered on the demands made by Hamas and on the Egyptian proposals for compromise," said the official.
The negotiations have yet to yield a breakthrough, but neither side has declared them a failure, either. Netanyahu, Barak, and Lieberman will meet again Monday night to continue their deliberations, and to receive updates on the negotiations and on the fighting in the Gaza Strip.
"The situation is now 50-50, between cease-fire and expansion of the operations," said the official. "If there is no choice, we'll go into Gaza. There is no other way."
Egyptian Prime Minister Hisham Kandil said Monday that the efforts to negotiate a truce between Israel and the Palestinians in Gaza were ongoing and that a deal to stop the fighting could be close.
"Negotiations are going on as we speak and I hope we will reach something soon that will stop this violence and counter violence," Kandil said in an interview in Cairo for the Reuters Middle East Investment Summit.
"I think we are close, but the nature of this kind of negotiation, [mean] it is very difficult to predict," he said.
Separately on Monday, another Egyptian official, who declined to be identified, said that Egypt was receiving "encouraging signals" about a ceasefire and said both Israel and Hamas were seeking guarantees.
"What we are trying to agree on is to achieve a ceasefire and achieve some possible guarantees, and then later discuss more guarantees," the official told Reuters.
Izzat Risheq, aide to Hamas politburo chief Khaled Meshal, wrote on Facebook that Hamas would enter a truce only after Israel "stops its aggression, ends its policy of targeted assassinations and lifts the blockade of Gaza".
Listing Israel's terms, Vice Prime Minister Moshe Yaalon wrote on Twitter: "If there is quiet in the south and no rockets and missiles are fired at Israel's citizens, nor terrorist attacks engineered from the Gaza Strip, we will not attack."
The crisis in Israel and the Gaza Strip topped the agenda of a meeting of European Union foreign and defense ministers in Brussels, as well.
European Union foreign policy chief Catherine Ashton expressed concern about the mounting death toll in the Gaza conflict, saying the crisis can only be resolved with a long-term solution.
Ashton also said rocket attacks from Gaza into Israel must stop: "What we have to do is to find ... a solution that brings security to the region," Ashton said.
Israeli forces are attacking Gaza in an effort to stop the militant rocket fire, and scores of Palestinians and three Israeli civilians have been killed in the conflict.
Swedish foreign minister Carl Bildt said the most important thing was to arrange an immediate cease-fire.
"Then, we must look at the wider and deeper issues," he said. "This is the second Gaza war in a few years. We can't wait for the third and fourth."
Russia also urged an end to Palestinian rocket attacks, and what it called the disproportionate Israeli bombing of the Gaza Strip, saying both were unacceptable.
"Moscow considers it necessary to stop the military confrontation without delay," the Russian Foreign Ministry said in a statement.
"We again affirm our position on the inadmissibility of firing at Israeli regions and of disproportionate strikes on Gaza," the Russia Foreign Ministry said.
Foreign Minister Sergei Lavrov made a similar comment in a telephone conversation with his Palestinian counterpart, the Russian ministry said.
Russia is a member of the so-called Quartet of Middle East peace mediators, along with the United States, the United Nations and the European Union.
President Vladimir Putin has tried to balance ties with Arabs including the Palestinians, dating to the Soviet era, with improved relations with Israel during his 13 years in power.