Israeli troops clashed with Hamas fighters on Monday across the Gaza Strip after the Jewish state poured reserve troops into the territory and ceasefire talks plodded on in Egypt.
Israeli warplanes struck some 12 targets in Gaza overnight, the army said, marking the lowest level of night-time bombing of Israel's deadliest offensive in the Palestinian enclave launched in response to rocket fire.
Infantry units exchanged fire with Palestinian fighters across Gaza, including in the northern town of Jabaliya and the southern town of Khan Yunis, the army and witnesses said.
Late Sunday Israel sent reserve troops into Gaza in what Israeli media said could be a sign of intensifying operations.
In Egypt, which has been spearheading Western-backed efforts to end the Israeli offensive that has claimed nearly 900 lives, talks were due to resume between Egyptian officials and Hamas.
But Israel's pointman for Gaza truce talks, Amos Gilad, delayed a planned visit in what Israeli radio speculated was meant as a pressure tactic on Hamas.
On Sunday a senior Israeli official told AFP that "Olmert believes Israel can reach an understanding with Egypt but at the moment, there is no intention to let up the pressure on Hamas."
Speaking during the cabinet meeting on Sunday, Olmert said that "Israel has no intention to decrease the pressure on Hamas."
On Sunday, Cairo upped the pressure on Israel by summoning its ambassador to demand that the Jewish state comply with last week's UN Security Council resolution and open humanitarian corridors to relieve the besieged territory.
Both Israel and Hamas have waved off the resolution that called for an immediate end to the fighting.
Cairo said that it had held positive talks with a Hamas team, saying the Islamists agreed "on the importance of stopping the shedding of Palestinian blood as soon as possible."
Osama Hamdan, Hamas's representative in Lebanon, told Al-Jazeera television afterwards that "there was some progress on some points" of the Egyptian proposal.
"We reject parts of this proposal but that does not mean rejection of all the proposal." He added without elaborating that there had been no progress "on some of the sensitive points."
The negotiations in Cairo are centering on a three-point plan that Egyptian President Hosni Mubarak unveiled during the week.
The plan calls for an immediate ceasefire to allow humanitarian aid into Gaza, talks on opening Gaza's border crossings and taking steps to prevent arms smuggling, and relaunching Palestinian reconciliation efforts.
Israeli officials on Sunday suggested the war the Jewish state unleashed on Hamas in Gaza could be approaching an end, in first such comments since the start of the offensive on December 27.
"The decision of the (UN) Security Council doesn't give us much leeway," Deputy Defence Minister Matan Vilnai told public radio.
"Thus it would seem that we are close to ending the ground operation and ending the operation altogether."
Earlier, Prime Minister Ehud Olmert said Israel was nearing the goals it had set for its operation, but that fighting would continue for now.
"Israel is approaching these goals, but more patience and determination are required," Olmert told a cabinet meeting.
Since the start of Israel's Operation Cast Lead on December 27, at least 890 people have been killed, including 275 children, and another 3,800 wounded, according to Gaza medics.
Ten Israeli soldiers and three civilians have been killed in combat or in rocket attacks since the operation began. Palestinian militants have fired nearly 700 rockets, some of them penetrating deeper than ever inside Israel.
The conflict has sparked worldwide pro-Palestinian demonstrations, and US president elect Barack Obama said he is assembling a team of diplomats to start addressing the Middle East conflict once he is sworn in on January 20.