Israel has accepted a deal proposed by Egypt that would halt the week-long conflict in the Gaza Strip on Tuesday but a spokesperson for Hamas, which controls Gaza, has rejected the plan as "unacceptable".
At Israeli military headquarters in Tel Aviv, the security cabinet convened by Prime Minister Benjamin Netanyahu said it voted to approve the truce deal, minutes before it was due to come into effect at 9am local time.
Earlier, Hamas acknowledged "diplomatic movement" on ending the conflict, but spokesman Sami Abu Zuhri told the Associated Press after Israel accepted the offer: "This proposal is not acceptable."
Mr Zuhri said the Islamist group had not received an official draft of the ceasefire proposal. He repeated its position that conditions it has set must be met before it lays down its weapons.
Mr Netanyahu has since warned Israel would have "all international legitimacy to broaden the military operation to achieve the required quiet". He told reporters that "if Hamas rejects the Egyptian proposal and the rocket fire from Gaza does not cease, and that appears to be the case, we are prepared to continue and intensify our operation."
The Egyptian-brokered plan calls for a ceasefire to begin within 12 hours of "unconditional acceptance" by the sides, followed by the opening of Gaza's border crossings and talks in Cairo within two days. High-level delegations from Israel and the Palestinian factions would then hold separate talks in Cairo within 48 hours to consolidate the ceasefire with "confidence-building measures", according to the proposal.
The deal comes as Israel said it had bombed 25 sites in Gaza overnight and said there had been two cross-border launches, both of which did not cause any damage.
Palestinian medical officials said a 63-year-old man and a 52-year-old woman were killed - bringing the enclave's death toll to more than 182. The UN estimates that most of these deaths were civillians.
Palestinian President Mahmoud Abbas has welcomed the proposal and urged its acceptance, according to the official Palestinian news agency WAFA.
Amos Gilad, a senior Israeli defence official and envoy to Cairo, cast the deal positively and claimed Hamas had been weakened by the air and sea bombardment of Gaza.
"Look at the balance, and you see that Hamas tried every possible means of striking at Israel while bringing great and terrible damage on its people, from their perspective," Mr Gilad told Israel's Army Radio.
"The Egyptian proposal includes a halt to all kind of (military) activity," he continued. "What this proposal, if it is accepted, means is that, willy-nilly, Hamas did not manage to make good on its intentions."
In pictures: Israel launches further air strikes on Gaza
In pictures: Israel launches further air strikes on Gaza
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Israeli soldiers rest next to artillery shells from an artillery unit near the Israeli border with Gaza
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Palestinian mourners pray in a mosque during the funeral for those killed in a three-storey house belonging to the Abu Jamaa family the day before, in Khan Yunis in the southern Gaza Strip
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Palestinian mourners pray over five bodies, all from the Halaq family, during their funeral in the Jabalia refugee camp, in the Gaza Strip
MAHMUD HAMS/AFP/Getty Images
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The aunt of Palestinian boy Mohammed Ayad, who medics said was killed during heavy Israeli shelling, mourns as she looks at his body during his funeral in Gaza City
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Two Palestinian men flee their homes during a temporary ceasefire in the heavily-hit Shuja’iya neighbourhood in Gaza City
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Palestinian women react next to the rubble of their relatives' house, which police said was destroyed in an Israeli air strike, in Khan Younis in the southern Gaza Strip
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Palestinians gather as a bulldozer searches for victims amongst the rubble of a house, which police said was destroyed in an Israeli air strike, in Khan Younis in the southern Gaza Strip
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Palestinians paramedics lift the body of a man from the Al Shejaeiya neighbourhood, during a brief period of ceasefire requested by local rescue forces to retrieve dead and wounded from the Shuja'iyya neighbourhood in east Gaza City
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An Israeli soldier gestures on a Merkava tank, as part of the Israeli army deployment near Israel's border with the Gaza Strip
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Palestinian Beisan Dhahir (7) sleeps at Shifa hospital in Gaza City. Beisan's home was shelled and collapsed by Israel's military operation in Shijaiyah in the Gaza Strip. She survived the ordeal with her aunt and uncle. Beisan's mother, father, brother, sister and baby sister all died in the attack
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A picture taken from Israel at the southern border with the Gaza strip shows smoke billowing from behind a hill following an Israeli air strike on Gaza City
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Palestinians clashes with Israeli troops following the protest against the Israeli operations in Gaza at the al-Jalazone Camp in Ramallah, West Bank
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An Israeli soldier sleeps on a tank near the Israeli border with the Gaza Strip. Israeli strikes killed at least 20 people in Gaza on Saturday 19 July, taking the death toll from a 12-day bombardment to 324
Jack Guez/AFP/Getty Images
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Sderot, Israel: Soldiers are seen advancing towards the Israeli-Gaza border during an operation near Sderot, Israel. As operation 'Protective Edge' enters its 12th day, over 300 Gazans have been killed along with three Israeli soldiers
Andrew Burton/Getty Images
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Palestinian men help a local journalist who got injured during an Israeli airstrike on an office building hosting several media outlets in Gaza City
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Palestinians help an injured colleague to leave a building hit by an Israeli air strike on Gaza City
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Palestinians leave their neighborhood to a safer location after Israel's army stared its ground offensive in Rafah, in the southern Gaza Strip
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Israeli soldiers seen along the border with Gaza before the attack
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An Israeli missile strikes in Gaza City
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Palestinians run for shelter as they hear bombing in the distance while they flee their homes in the Shajaiyeh neighborhood of Gaza City, after Israel had airdropped leaflets warning people to leave the area
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Relatives of 4 Palestinian children killed in Israeli airstrike while they were playing on the beach, mourn in Gaza City
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A Palestinian man cries as he holds the dead body of his young brother shortly after he got killed by an Israeli naval bombardment in the port of Gaza City in the morgue of the Shifa hospital in Gaza
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Young relatives of four boys, all from the Bakr family, killed during Israeli shelling, cry during their funeral in Gaza City
AFP PHOTO / MOHAMMED ABEDMOHAMMED ABED/AFP/Getty Images
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Palestinian employees of Gaza City's al-Deira hotel carry a wounded boy following an Israeli military strike nearby on the beach
THOMAS COEX/AFP/Getty Images
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A Palestinian man reads a leaflet dropped by Israeli Defense Forces over the Shuja'iyya neighbourhood in east Gaza. The paper says residents of the area are supposed to leave the area immediately and seek shelter in the center of Gaza City before the Israeli airforce will commence airstrikes. According to Israeli sources 100,000 people were notified to flee, only a few did
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Palestinian children run to collect leaflets dropped by Israeli Defense Forces over the Shuja'iyya neighbourhood in east Gaza City
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Palestinians salvage what they can of their belongings from the rubble of their destroyed house following an early morning Israeli missile strike in Gaza City
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A Palestinian man looks at a house destroyed by Israeli Defense Forces during an overnight air strike in Gaza City
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A Palestinian man stands amidst the debris of the house of senior Hamas official Mahmud al-Zahar which was destroyed by Israeli Defense Forces in an air strike in Gaza City
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Palestinians search a destroyed house following an Israeli missile strike in Rafah
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A man walks near the Israeli Gaza border
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Smoke rises from a Palestinian house during an attack by Israeli missiles in Jabaliya in the northern Gaza Strip. Israel bombed 40 more targets in the Gaza Strip and Palestinian militants launched at least 20 rockets across the border, despite a call by UN Secretary-General for a truce. The death toll rose to over 170 on the seventh day of the Israeli offensive, with more than 1,200 wounded, a Gaza Health Ministry spokesman said
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A photo taken from the southern Israeli Gaza border shows Israeli army flares falling into the Palestinian enclave. Israel's security cabinet was to meet early on July 15 to discuss Egyptian proposals for a truce in Gaza, a senior official said, as an aerial campaign against Hamas entered its eighth day
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A Palestinian elderly walks past a destroyed house in the north of Beit Lahiya town in the northern Gaza Strip
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A Palestinian baby Abdullah Abu Halib, wounded during an Israeli airstrike, is treated at Nasser Hospital in Khan Yunis
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The funeral ceremony of three members of El-Muammer family, killed in Israeli airstrikes on Gaza, is held in Khan Yunis
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Relatives carry the body of 3-year-old Palestinian boy Moayad al-Araj, who hospital officials said were killed in an Israeli air strike, during his funeral in Khan Younis
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Palestinian relatives mourn during the funeral of four members of the Moamer family, including a 26-year-old militant of the Hamas movement, during their funeral in southern Gaza Strip city of Rafah
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A young Palestinian boy walks over debris from a house that was destroyed in an airstrike in Deir Al Balah
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Palestinian boys inspect the damage in a mosque that was destroyed overnight by an Israeli airstrike in Deir Al Balah
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Palestinian firefighters extinguish a fire that broke out after an Israeli air strike hit a car in Gaza City
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Palestinians gather around a firing car following an Israeli air strike in Gaza City
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A Palestinian man walks next to a destroyed house following Israeli missile strike in Gaza City
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Palestinians gather around the remains of a house, which police said was destroyed in an Israeli air strike in Rafah
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Palestinians carry the body of three-year-old Mohammed Mnassrah who was killed along with his parents and brother in an airstrike, during his funeral in Al Maghazi refugee camp in the eastern Gaza Strip
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Relatives and friends of al-Hajj family mourn as they gather in a mosque to pray over the bodies of the eight family members during their funeral in Khan Yunis
A smoke and fire billowing from an Israeli gas station after it was hit by a rocket fired from the Palestinian Gaza Strip
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A Palestinian firefighter hoses a boat hit in an missile strike at the port in Gaza City
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A Palestinian firefighter hoses a boat damaged by an missile strike at the port in Gaza City
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The destroyed house of the Palestinian Abu Lealla family following an Israeli airstrike north of Gaza City
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Palestinians inspect the rubble of a house after it was hit by an Israeli missile strike in Gaza City
Israeli fire-fighters extinguish a fire that broke out after a rocket hit a petrol station in the southern Israeli city of Ashdod
Israeli fire fighters extinguish vehicles destroyed by a rocket fired from the Gaza Strip that hit a gas station in the city of Ashdod
Israeli fire fighters extinguish vehicles destroyed by a rocket fired from the Gaza Strip in the city of Ashdod
Israeli firefighters try to extinguish the fire from several cars that were damaged by a missile fired from the Gaza Strip that hit a gas station in the southern city of Ashdod
Firefighters try to douse a fire from a rocket that hit a Petrol station in Ashdod
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A ball of fire is seen following an air strike on Rafah in the southern of Gaza strip
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Palestinian firefighters extinguish fire from a building following an Israeli air strike in Gaza City
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A Palestinian man walks on the rubble of a destroyed building following an Israeli air strike in Gaza City
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Palestinians carry bodies of seven people killed in a strike during their funeral in Khan Younis refugee camp
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Israel launched the military operation 'Protective Edge', which came in response to a renewed wave of rockets out of the Gaza Strip, for some of which Palestinian group Hamas has claimed responsibility. There have been more than 120 Israeli airstrikes in the coastal enclave, according to Palestinian sources, while hundreds of rockets and mortar shells have landed in southern Israel. Israeli military spokesman Peter Lerner said the offensive, named Protective Edge, could grow into a 'ground mission if required'
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Flames engulf a building hit by an Israeli air strike
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Palestinians inspect damages following an Israeli air strike
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Palestinian rescuers check a car hit by an Israeli air strike killing the driver in Gaza City
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A Palestinian woman runs carrying a girl following what police said was an Israeli air strike on a house in Gaza city
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Palestinians sitting on a street react after a deadly Israeli air strike that targeted their house in the town of Khan Yunis in the Gaza Strip
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Palestinian relatives mourn during the funeral of members of Hamad family in the town of Beit Hanoun in the northern Gaza Strip
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A Palestinian man carries his wounded daughter into the al-Shifa hospital in Gaza City following an Israeli air strike
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Palestinians stand on the edge of a crater as others look for people under the rubble of a house that was destroyed in an Israeli air strike in Gaza City
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A Palestinian removes rubble near a damaged building belonging to a senior Hamas official following an Israeli missile strike in the Jabaliya refugee camp in the northern Gaza Strip
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Palestinians collect their belongings from the rubble of their house which police said was destroyed in an Israeli air strike in Rafah
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Beit Hanoun, a city on the northeast edge of the Gaza Strip, hit by Israeli airstrike, West Bank
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A Palestinian man removes blooded cushions from an outdoors sitting area following an Israeli air strike in Beit Hanun
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Relatives and friends of the al-Kaware family carry one of the 7 members of the family to the mosque during their funeral in Khan Yunis
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A Palestinian boy who was injured in an Israeli airstrike, sits next to his mother after receiving treatment at a hospital in Khan Younis
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A picture taken from the southern Israeli border with the Gaza Strip shows smoke billowing after an Israeli air strike in the Palestinian coastal enclave
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Wounded Palestinians are taken to hospitals after Israel airstrikes targeted different points of Gaza city
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A Palestinian boy cries as he receives treatment at a hospital after he was injured in an Israeli airstrike in Khan Younis
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Two Palestinian girls inspect the ruble of a destroyed house following an Israeli airstrike in Rafah refugee camp
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A Palestinian woman makes her way through debris as people inspect the remains of a house belonging to a member of the Islamist Hamas movement following an Israeli air strike in the Gaza strip town of Khan Yunis
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A Palestinian man searches for belongings under the rubble of a house which police said was destroyed in an Israeli air strike in Gaza City
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Palestinian men carry a pumpkin and watermelon as they walk across the rubble
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Palestinians stand atop the rubble of a house which police said was destroyed in an Israeli air strike
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Smoke rises after an attack of Israeli aircraft in the South of Gaza City
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The father of killed Hamas militant Rashad Yassin (28) arrives at the morgue of the al-Aqsa hospital in Deir al-Balah, in the central Gaza strip
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Smoke and flames are seen following what police said was an Israeli air strike in Rafah in the southern Gaza Strip
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Fire fighters extinguish a vehicle targeted in an Israeli airstrike on Gaza City
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Wounded people are taken to the hospital in Gaza city
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A smoke rises after an Israeli air strike in the Palestinian coastal enclave
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A Palestinian girls in the rubble of the destroyed home of the Al Abadlla family following an Israeli airstrike in Khanyounis, southern Gaza Strip
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Palestinians inspect the rubble of a house after it was hit by an Israeli missile strike in Khan Younis, southern Gaza Strip
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Palestinians inspect destroyed area as smoke rises from the ruins in Khan Yunis after the Israeli airstrikes aiming Gaza
The Iron Dome air-defense system fires to intercept a rocket over the city of Ashdod. Due to recent escalation in the region, the Israeli army started new deployments at the border with the Gaza Strip
An Israeli soldier performs a morning prayer in an army deployment area near Israel's border with the Gaza Strip
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A woman stands inside her destroyed house in Khan Yunis
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Palestinians inspect destroyed area in Khan Yunis after the Israeli airstrikes aiming Gaza
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Palestinian men carry an injured person into Gaza City's al-Shifa hospital following an Israeli air strike
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Smoke rises following what witnesses said was an Israeli air strike in Gaza City
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Palestinians collect their belongings from damaged houses after an Israeli missile strike hit Gaza City
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The Israeli air force launched dozens of raids on the Gaza Strip after massive rocket fire from the enclave pounded southern Israel, leaving many people injured
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A Palestinian girl stands in a destroyed building following an Israeli military strike in Gaza City
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A destroyed building in seen following an Israeli military strike in in Khan Yunis, in the soutehrn Gaza Strip
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Palestinians march during funeral of Palestinian Marwan Sleem in the central Gaza Strip
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Israeli soldiers ride atop a tank outside the southern Gaza Strip. Israel launched a series of air strikes on Gaza to quell Hamas rocket fire, and the Islamist group's armed wing said seven of its gunmen were killed, making it the deadliest day for Hamas since a 2012 cross-border war with the Jewish state
Hamas's armed wing, the al-Qassam Brigades, earlier appeared to reject the reported text of the truce deal, saying: "Our battle with the enemy continues and will increase in ferocity and intensity."
And speaking on CNN's The Situation Room with Wolf Blitzer, senior Hamas representative Osama Hamdan described the deal as a "joke."
"We did not receive this declared paper from the Egyptians ... which means it's an initiative for the media. It's not a political initiative," he said.
"What they are trying to do is to corner the Palestinians and to help the Israelis more."
The worst Gaza conflict in two years has seriously injured at least four killed Israelis but no one in Israel has been killed, largely due to its Iron Dome anti-missile system. However, the frequent rocket salvoes have disrupted life as air raid sirens sent people in much of the country moving to shelters for safety.
The Arab League said in a statement it welcomed the Egyptian initiative "to protect the lives of the innocent."
US Secretary of State John Kerry will hold talk with Egyptian officials in Cairo on situation later on Tuesday, Egypt's state news agency reported. In Washington, US President Barack Obama on Monday spoke positively of the emerging ceasefire.
In a speech, Mr Obama described the deaths of Palestinian civilians as a "tragedy" while reiterating US support for Israel in the face of Hamas's attacks, saying: "We are encouraged that Egypt has made a proposal to accomplish this (truce) goal which we hope can restore a calm that we've been seeking."
Hours before the proposal was announced, Gaza militants resumed rocket attacks on Tel Aviv after a 24-hour lull, while Israel continued its strikes in the Gaza Strip and deployed infantry and armour along the frontier.
Israel had mobilised tens of thousands of troops for a threatened Gaza invasion if the rocket salvoes persisted.
"We still have the possibility of going in, under cabinet authority, and putting and end to them (the rockets)," Mr Gilad added.
Late on Monday, Israel bombed the house of Marwan Issa, a top commander of Hamas' armed wing, in Bureij refugee camp.
The surge in hostilities over the past week was prompted by the murder last month of three Jewish seminary students in the occupied West Bank and the suspected revenge killing on 2 July of a Palestinian youth in Jerusalem.
Israel said on Monday three Jews were being detained in police custody after allegedly confessing to killing Arab teenager Mohammed Abu Khdeir, but their names have not been released.
Hamas leaders have said a ceasefire must include an end to Israel's blockade of Gaza and a recommitment to a truce reached in an eight-day war there in 2012. Hamas also wants Egypt to ease restrictions at its Rafah crossing with Gaza imposed after the military ousted Islamist president Mohamed Morsi last July.
But the Egyptian proposal made no mention of Rafah or when restrictions might be eased. It said only that "crossings shall be opened and the movement of persons and goods through (them) shall be facilitated once the security situation becomes stable on the ground".
Hamas has faced a cash crisis and Gaza's economic hardship has deepened as a result of Egypt's destruction of cross-border smuggling tunnels. Cairo accuses Hamas of aiding anti-government Islamist militants in Egypt's Sinai peninsula, an allegation the Palestinian group denies.
Hamas has said it wants the release of hundreds of its activists arrested in the West Bank while Israel searched for the three missing teens. The detainees include more than 50 Hamas men freed from Israeli jails in a 2011 prisoner exchange.
Additional reporting by Reuters