GAZA CITY, PALESTINIAN TERRITORIES (AFP) - Israel and Hamas appeared at odds on Thursday over prolonging a 72-hour Gaza ceasefire, with the Jewish state indicating it would back an unconditional extension but Hamas denying any agreement.
Guns have stayed silent in the tiny Palestinian enclave since 8am on Tuesday, bringing relief to millions of people on both sides after the deaths of 1,886 Palestinians and 67 on the Israeli side.
Egyptian mediators have accelerated efforts to extend the truce after it expires at 0500 GMT (1pm Singapore time) on Friday, shuttling between Israeli and Palestinian delegations in Cairo.
"Israel has no problem extending the ceasefire unconditionally," an Israeli official told AFP on condition of anonymity late on Wednesday. There was no immediate reaction from Hamas.
A spokesman for the Israeli army said 27,000 reservists called up for the conflict had been sent home, leaving a force of 55,000 still on active duty, in another sign of growing hopes for long-term quiet.
But Hamas deputy leader Mussa Abu Marzuq, part of the Palestinian delegation holding talks in Cairo, denied overnight there was yet any agreement.
"There is no agreement to extend the ceasefire," he wrote on Twitter.
"Any news about the extension of the truce is unfounded," added Hamas spokesman Sami Abu Zuhri.
In the battered Gaza Strip, shops, banks and markets have reopened, and people crowded into the streets.
Emergency services cleared rubble and pulled more bodies from the rubble, raising the overall Palestinian death toll to 1,886, according to the Palestinian health ministry.
In the southern town of Rafah, one of the worst-hit areas where Israel sought to destroy a network of Hamas tunnels, local residents buried bodies stacked in morgues while the fighting raged.
Many residents are angered by the extent of damage to their homes.
Nearly half a million Palestinians were displaced by Israeli bombardment, and many are still sheltering in schools after their homes were flattened in the offensive.
"Look at my house, it is totally smashed. How can my children live here?" asked Mussa Abu al-Rus, whose house had been taken over by Israeli soldiers.
ISRAEL SAYS ACTIONS 'PROPORTIONATE'
In Jerusalem, Israeli Prime Minister Benjamin Netanyahu launched a vigorous defence of the conflict in the face of international criticism over heavy Palestinian civilian casualties.
"I think it was justified. I think it was proportionate and that doesn't in any way take away the deep regret we have for the loss of a single civilian casualty," Netanyahu said in his first public remarks since the ceasefire came into effect.
Israel had faced growing international, including US, criticism over the heavy number of Palestinian civilian casualties. Its loss of 64 soldiers is its most severe since the 2006 war against Hizbollah.
UN Secretary General Ban Ki Moon warned that after three wars in Gaza in six years, international patience with both sides was being tested.
He opened a special meeting of the UN General Assembly with an appeal for a lasting peace.
"The senseless cycle of suffering in Gaza and the West Bank, as well as in Israel, must end," he said.
Netanyahu showed reporters aerial images of homes and of a UN-run school, from which he said Hamas fired mortars and rockets.
He accused the armed faction of deliberately increasing the death toll by using human shields and called on the international community to ostracise the group "for its callous abuse of civilians".
"Every civilian casualty is a tragedy, a tragedy of Hamas's own making," he added.
Egyptian officials mediating talks for a durable truce in Gaza met a Palestinian delegation to relay terms laid down by an Israeli team overnight, Palestinian officials said.
Hamas officials have publicly rejected an Israeli demand for Gaza to disarm.
HAMAS 'WON'T YIELD'
Ismail Haniya, Hamas's top Gaza-based official, was defiant ahead of the talks, saying the Palestinian side would "not yield on any of our demands".
The Palestinians have insisted Israel end its eight-year blockade of Gaza and free scores of Hamas prisoners.
Israel has refused to deal with a Palestinian unity government that emerged after Hamas signed a deal with Palestinian President Mahmud Abbas in April following years of bitter rivalry.
But Netanyahu said Israel was cooperating with the Abbas-led Palestinian Authority.
"We are prepared to see a role for them," he said.
"It is important in the reconstruction of Gaza, assuring the humanitarian aid and also the security questions that arise that we have these discussions and cooperation," the premier added.
In a BBC interview, US Secretary of State John Kerry said there would have to be compromise on both sides in order to obtain a permanent ceasefire.
"How are we going to eliminate these rockets? How are we going to demilitarise and move towards a different future?" he asked.
Netanyahu welcomed Kerry's remarks and sought to counter reports that Israeli-US relations plunged to a rare low point during the conflict.
"We work very closely with him (Kerry), with the US administration with President (Barack) Obama throughout this operation and before," he said.