Israel said Thursday it had agreed on a truce with Hamas to end 10 days of violence in Gaza, although the reported deal was denied by the Islamist movement.
News of a fresh attempt to end the worst bloodshed in the Gaza Strip in five years came during a five-hour humanitarian truce, under which both Israel and Hamas militants had agreed to hold their fire.
As relative calm returned to the skies over Gaza for the first time since July 8, Palestinian president Mahmud Abbas was due to meet with his Egyptian counterpart, Abdel Fattah al-Sisi as Cairo pushed regional efforts to broker a new ceasefire deal.
An earlier Egyptian attempt to end hostilities collapsed on Tuesday, with Hamas claiming it had not been included in the negotiations.
Speaking on condition of anonymity, an Israeli official told AFP the Jewish state and Hamas "have agreed on a ceasefire" that would begin at 0300 GMT on Friday.
But Hamas shot down the report.
"The news about a ceasefire is incorrect. There are continuing efforts but no agreement until now," spokesman Sami Abu Zuhri told AFP in Gaza.
Humanitarian lull ends
Despite the diplomacy, there seemed little appetite from either side to end their confrontation, which has so far claimed the lives of 231 people in Gaza and one person in Israel.
During the five-hour humanitarian lull, which had been requested by the United Nations, militants in Gaza fired three mortar shells at southern Israel. And shortly after it ended at 1200 GMT, another Gaza rocket crashed near the southern port city of Ashkelon, the army said.
In a separate incident, an Israeli soldier was lightly injured by an explosion near the fence, with the army firing back across the border, the army said.
The two sides had agreed to temporarily suspend hostilities, with a senior UN official saying the Kerem Shalom crossing in southern Gaza would be opened to allow in medical aid.
It also gave Gazans a chance to leave their homes and stock up on supplies, or pick up belongings from homes which they had evacuated.
In Gaza City, the streets immediately filled with honking cars and traffic jams, and outside banks, hundreds of people massed by ATMs to withdraw money to buy supplies.
"It's not enough. People need to go out and get supplies and to get their belongings. It should have been from 7:00am until dusk," Mohamed Nasr told AFP.
"We've been stuck in our houses during this war, because of the violence. It's like living under curfew."
Just moments before the humanitarian truce began at 0700 GMT, Israeli tank fire killed three people in southern Gaza, Palestinian medics said.
And the army said it had foiled a "major terror attack" by a group of 13 militants who managed to enter southern Israel by tunnel and were seen heading towards Sufa kibbutz near the fence, army spokesman Lieutenant Colonel Peter Lerner told reporters.
They were targeted in an air strike, which killed one and sent the others fleeing back into the tunnel, he said. The raid was claimed by Hamas, which said its militants had carried out a successful "mission" into Israel.
Talks under way
Meanwhile in Cairo, truce discussions were ongoing after the collapse of an earlier attempt to end hostilities on Tuesday that was accepted by Israel but rejected by Hamas, which said it had not been consulted.
An Israeli delegation that had been in the Egyptian capital was understood to have returned to Jerusalem, although officials were tightlipped on the substance of their talks.
Full coverage: Gaza under attack
In Gaza, Hamas spokesman Ihab Ghussein said there were talks and contacts under way but dismissed reports of a deal.
"The killing by the Israelis should stop before talking about any ceasefire," he told AFP.
"The contacts are still ongoing, discussions and meetings are still going on, hopefully there will be something to stop this, but (any ceasefire) will include what the Palestinians require and want."
Hamas has laid out a set of conditions, among them the lifting of Israel's eight-year blockade on the Gaza Strip, the opening of the Rafah border crossing with Egypt and the release of Palestinian prisoners Israel has rearrested after freeing them in exchange for kidnapped Israeli soldier Gilad Shalit in 2011.