GAZA CITY - A three-day ceasefire in Gaza that has brought relief to millions entered its final stretch on Thursday with Israel ready to extend the calm but Hamas hedging its bets.
And US President Barack Obama put pressure on intensive ceasefire negotiations in Cairo by saying Gaza could not remain cut off from the world forever.
Britain, France and Germany have put forward an initiative that could bring EU representatives to the Gaza border, a diplomatic source said.
Four weeks of bloodshed between Israel and Hamas killed 1,886 Palestinians and 67 on the Israeli side. Figures released by UNICEF, the UN children's fund, indicate that 73 percent of the victims - or 1,354 people - were civilians.
Of that number, at least 429 were children - around 30 percent of the civilian casualties.
With the ceasefire due to end at 0500 GMT on Friday, Egypt's intelligence chief Mohamed Farid Tohamy was holding a new round of talks with the parties on Thursday afternoon, with the focus on extending the deadline.
But the Israeli delegation was headed back home on Thursday afternoon, an official told AFP. It was not clear whether they would return to Cairo later in the day.
Israel has said it would be prepared to prolong the ceasefire "unconditionally".
But Hamas said agreement had still not been reached to extend the calm which went into force on Tuesday.
"There is no agreement to extend the ceasefire," Hamas' exiled deputy leader Mussa Abu Marzuq wrote on Twitter.
In Gaza City, hundreds turned out to attend a victory rally where the speakers whipped up the crowd, which chanted back: "Resistance, resistance, resistance!"
"We have won the military battle and with the permission of God we'll win the political battle," Hamas MP Mushir al-Masri told them as loudspeakers blared out victory songs.
With the guns silent, some semblance of normal life has returned to Gaza with traffic clogging the streets and people bustling about their business as shops, banks and markets resume business.
In some areas, there are scenes of utter devastation, with certain districts reduced to an endless sea of rubble and shattered hulks of buildings, an AFP correspondent said.
UN Secretary General Ban Ki-moon said that Gaza would be rebuilt -- but hopefully for the last time, as international patience showed signs of wearing thin.
"The senseless cycle of suffering in Gaza and the West Bank, as well as in Israel, must end," he said.
"Do we have to continue like this -- build, destroy, and build and destroy?
"We will build again but this must be the last time -- to rebuild. This must stop now."
Gaza must be opened
Ahead of Thursday's talks, Obama insisted that Gaza could not remain forever cut off by Israel's blockade, now in its eighth year.
"Long-term, there has to be a recognition that Gaza cannot sustain itself permanently closed off from the world," Obama told a news conference in Washington, saying the Palestinians needed to see "some prospects for an opening of Gaza so that they do not feel walled off."
Lifting the blockade is the main Palestinian demand in the ceasefire talks in Cairo.
Although Israel has expressed willingness to extend the truce indefinitely, there was no immediate word on its response to that.
"Today will be a crucial day," a member of the Palestinian delegation told AFP.
If a truce extension was proposed "we will think about it .. and that depends on how negotiations proceed today."
Israel's Defence Minister Moshe Yaalon sounded a cautious note, saying it was not clear where the talks would lead.
"I'm not sure what the outcome will be of the current discussions in Egypt," he said.
EU force at Rafah?
London, Paris and Berlin tabled an initiative offering an outline for rebuilding Gaza while ensuring Israel's security concerns were properly addressed, a diplomatic source said.
The proposal aims to strengthen the hand of Palestinian president Mahmud Abbas and his Palestinian Authority while clamping down on Gaza-based militant groups.
It proposes Abbas' security forces take control of border security in Gaza in conjunction with EU representatives and outlines a mechanism for preventing the rearming of militant groups or the construction of new tunnels.
It also envisages opening the Rafah border crossing with Egypt then eventually opening other crossings to Israel. It also refers to the opening of a commercial port in Gaza, the source said.
Netanyahu on Wednesday said Abbas's Palestinian Authority had an "important" role to play in Gaza, particularly in the reconstruction efforts.
Foreign Minister Avigdor Lieberman called for EU "inspectors" to monitor Gaza's borders, Germany's mass-circulation Bild daily reported on Thursday.
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Gaza truce deadline looms as Obama questions blockade