Hopes of a negotiated end to the Gaza war rose last night amid speculation that Hamas was close to accepting an Egyptian ceasefire plan.

Officials in Cairo said the militant Islamic group had responded favourably to the plan, while an Israeli Foreign Ministry spokesman said Amos Gilad, Israel’s top negotiator, would fly to Cairo today — meaning there was “something to discuss”. Bernard Kouchner, the French Foreign Minister, whose Government helped Egypt to devise the plan, said that the “outlines of a ceasefire have begun to appear”.

At a Cairo press conference last night Salah al-Bardawil, a Hamas representative, refused to say whether Hamas had accepted the plan, but said that Hamas and Egypt were “as one in dealing with the Zionist enemy”. Other Hamas sources said there were still sticking points.

However, even as Hamas appeared to be edging towards a ceasefire, clear divisions emerged within the Israeli leadership. Officials close to Ehud Olmert, the outgoing Prime Minister, criticised Ehud Barak, the Defence Secretary, for advocating a week-long humanitarian ceasefire that would give Hamas a “shot in the arm”.

Defence officials said Israel had achieved its goals by re-establishing the principle of deterrence and should now pursue a ceasefire agreement before Barak Obama’s inauguration next week. However Mr Olmert, the Shin Bet security service and some military commanders in Gaza reportedly want to wreak further destruction on Hamas before ending the conflict. Israeli television reported last night that Mr Olmert had stopped Tzipi Livni, the Foreign Minister, who also favours an end to the fighting, visiting Washington to further the diplomatic efforts.

The death toll passed 1,000 from the 19-day-old Israeli offensive yesterday but Palestinians said the fighting was less intense than during the previous three days. The ceasefire talks are being led by Omar Suleiman, Egypt’s intelligence chief, from an unknown location in Cairo.

Israel’s key demands are that Hamas ends its rocket attacks on southern Israel, and for a failsafe mechanism to stop Hamas smuggling in weaponry through hundreds of tunnels beneath the border with Egypt. The United States is believed to have offered teams of engineers to locate and destroy the tunnels. Some Israeli experts want to ring the Egyptian border town of Rafah, where most of the tunnels emerge, with a two-layer fence.

An unspoken Israeli demand is the return of Gilad Schalit, an Israeli soldier Hamas captured in 2006, but officials refuse to discuss that publicly.

Hamas had demanded that Israel withdraw immediately from Gaza, and end the blockade it imposed when Hamas ousted Fatah from power in Gaza in 2006. Israel, however, will agree to nothing that confers legitimacy on Hamas, which it regards as a terrorist organisation.

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