GAZA CITY - Two rockets fired by Gaza militants slammed into southern Israel before dawn on Friday, heightening fears that a 72-hour truce nearing its end would not be renewed.
Israel had earlier said it was ready to "indefinitely" extend the 72-hour lull, due to expire at 0500 GMT on Friday.
Then at about 0130 GMT the army sent out a text message to journalists.
"Just now, two rockets fired from Gaza hit southern Israel. No injuries reported," it said.
"Terrorists have violated the cease-fire," it added on its official Twitter site.
There has so far been no definitive announcement on the future of the ceasefire from Hamas, whose representatives and those of the Palestine Liberation Organisation (PLO) and Israel are in Cairo for talks with Egyptian mediators.
A Hamas official on the negotiating team said that a decision would be taken before 0500 GMT.
A senior Palestinian official earlier accused Israel of procrastinating, warning it could lead to as resumption of the fighting when the deadline runs out.
"The Israeli delegation is proposing extending the ceasefire while refusing a number of the Palestinian demands," he said, without elaborating.
"If Israel continues its procrastination, we will not extend the ceasefire."
A spokesman for Hamas's armed wing, the Ezzedine al-Qassam Brigades, warned just hours before the truce expired that fighting would resume if their demands were not met, first and foremost to open a sea port to the blockaded Palestinian enclave.
"If there is an agreement, it will be possible to extend the truce, but if there is not, we will ask the delegation to withdraw from the talks," a spokesman using the nom-de-guerre Abu Obeida said in a televised address.
Four weeks of bloodshed between Israel and Hamas killed 1,890 Palestinians, and 67 people on the Israeli side, almost all soldiers.
Ayman Taha, a former spokesman for Hamas -- the son of one of the group's founders -- was found dead Thursday in a neighbourhood of the city that was heavily bombed by Israel, the movement said.
UN figures indicate that 73 percent of the Palestinian victims -- or 1,354 people -- were civilians. Of that number, at least 429 were children.
Hamas and Palestine Liberation Organisation (PLO) officials have laid out a number of demands, starting with the lifting of Israel's eight-year blockade on Gaza.
They also want the release of around 125 key prisoners held in Israeli jails.
Israel's negotiating team, which had earlier flown home for consultations with Prime Minister Benjamin Netanyahu and Defence Minister Moshe Yaalon, returned later to Cairo, an Israeli official told AFP, without saying what was discussed.
In Gaza, an anonymous official familiar with the talks was pessimistic.
"The factions currently think they will resume fighting tomorrow morning," he told AFP on Thursday.
Uncertainty all round
"Right now there is uncertainty; on the one hand the public in Gaza and in the region and the international community is telling (Hamas) not to... leave negotiations," a senior Israeli military official said.
"On the other, the military wing of Hamas is warning they could restart the rocket launches."
Despite the withdrawal of all its troops from Gaza by the time the three-day truce began early on Tuesday, Israel has retained forces along the border who are ready to respond to any resumption of fighting.
Speaking in Jerusalem after a visit to Gaza, International Committee of the Red Cross president Peter Maurer said he was "deeply distressed and shocked" at the impact of violence, saying the scale of the civilian losses must not happen again.
And he suggested there may have been violations of international humanitarian law.
In some areas, there are scenes of utter devastation, with certain districts reduced to a sea of rubble and shattered hulks of buildings, an AFP correspondent said.
British aid agencies launched an emergency appeal for Gaza, with the Disasters Emergency Committee (DEC), which brings together 13 leading British charities at times of crisis, said half a million people had been forced from their homes, and that up to 1.5 million had limited access to water, sanitation or medical care.
US President Barack Obama upped the pressure on the talks by saying Gaza could not remain forever cut off by Israel's blockade which has been in place since 2006.
"Long-term, there has to be a recognition that Gaza cannot sustain itself permanently closed off from the world," he said, adding the Palestinians needed to see "some prospects for an opening of Gaza so that they do not feel walled off".
And London, Paris and Berlin submitted an initiative offering an outline for rebuilding Gaza while ensuring Israel's security concerns are 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 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.