Israel looked poised on Friday to call a unilateral halt to its deadliest ever offensive on Gaza after securing backing from the US and Egypt to prevent arms smuggling into the Hamas-run enclave.
A senior government official said Prime Minister Ehud Olmert's security cabinet was expected to vote in favour of a proposal at a meeting on Saturday night under which Israel would silence its guns after a three-week offensive even without a reciprocal agreement from the Islamists of Hamas.
However under the terms of the proposal, Israeli troops would remain inside the territory for an unspecified period, a senior Israeli government official said.
"The security cabinet is expected to vote in favour of a unilateral ceasefire at tomorrow's meeting following the signing of the memorandum in Washington and significant progress made in Cairo,'' the official told AFP, speaking on condition of anonymity.
"Israeli forces will remain in Gaza after the unilateral ceasefire takes place.''
The breakthrough came after Israel's Foreign Minister Tzipi Livni signed an agreement in Washington with Secretary of State Condoleezza Rice under which the US would step up its levels of surveillance to prevent smuggling into Gaza, and a top envoy returned from talks with officials in Cairo.
"Olmert was satisfied with the results of the talks in Cairo, which answered Israel's basic requirements for a thorough answer to Israel's demands to halt rocket fire and an agreement on coordination between Israel and Egypt on the opening of the crossings'' in Gaza, added the official.
"Olmert was satisfied with the (US) memorandum and the Egyptian talks.''
However although Olmert is in favour of the unilateral ceasefire plan, its approval is not certain as the security cabinet has shown previous divisions over the conduct of the war which was designed to put an end to the firing of rockets from Hamas.
Even as the stage was being set for a possible end to the Israeli offensive, which has so far claimed more than 1150 Palestinian lives, the military was staging a fresh wave of deadly air strikes on the beleaguered territory.
At least 10 people were killed late on Friday in an Israeli strike on a house in Gaza City during a funeral wake, according to Palestinian medics.
They were not immediately able to say whether the explosion was caused by a tank shell or an air strike.
The deaths came shortly after a woman and her five children - all under the age of 13 - were killed when an air strike destroyed their house in Jabaliya, north of Gaza City, according to medics.
Earlier Khaled Meshaal, the exiled head of Hamas's politburo, told Arab leaders that his movement would not accept any ceasefire that did not provide for a full Israeli pullout and the opening of Gaza's borders, including into Egypt.
"I assure you: despite all the destruction in Gaza, we will not accept Israel's conditions for a ceasefire,'' he told a meeting of Arab and other leaders in Doha shortly before Hamas was invited to Cairo for a fresh round of talks.
The summit hosted by Qatar to address the Gaza war was boycotted by Egypt, Saudi Arabia and the Palestinian Authority, whose leaders will instead attend an Arab League gathering in Kuwait on Monday.
Clamping down on the porous Gaza-Egypt border, where hundreds of underground tunnels form Hamas's main rear supply route, has been a key Israeli demand for ending the offensive that has has also wounded around 5160 people.
After signing the deal in Washington, Livni told Israeli television that smuggling weapons into Gaza was tantamount to firing at Israel.
"They continue doing this, Israel has the right to respond,'' she said.
Rice said she hoped the agreement, under which the US will step up its surveillance on land, at sea and in the air in a bid to stamp out arms smuggling, would advance efforts to secure a ceasefire.
"There's a lot of work ahead here, but I certainly hope that we can push this to conclusion or ceasefire very, very soon.''
Hamas, which seized control of Gaza in June 2007 in a violent coup that ousted forces loyal to the Western-backed Palestinian president Mahmud Abbas, wants to be represented at Gaza's Rafah border crossing with Egypt.
Israel however has demanded that the border be monitored by Abbas's forces, and rejected a proposal by Hamas, conveyed via Egypt, for a year-long renewable ceasefire, according to an Israeli diplomatic source.