Indirect negotiations between Palestinians and Israelis for a truce in Gaza resumed on Wednesday, a Palestinian official said, as the clock ticked toward the midnight expiration of a three-day halt to hostilities.

The talks, held at the General Intelligence headquarters in Cairo, were expected to last all day as Egyptian mediators race to bridge the gaps between the two sides.

The negotiations "are in a very sensitive stage and we hope to reach an agreement" before midnight, said Palestinian delegation head Azzam al-Ahmed.

Nearly 2,000 Palestinians have been killed since Israel launched its Gaza offensive on July 8 to halt cross-border rocket fire. On the Israeli side, 67 people have been killed, mostly soldiers.

Egypt brokered the 72-hour truce which took effect at 00:01 on Monday, and has urged the warring sides to make every effort to reach "a comprehensive and permanent cease-fire".

The Palestinians, included representatives of Gaza's de facto rulers, Hamas, are demanding an end to the eight-year blockade of Gaza.

Palestinian officials said Israel had so far proposed easing restrictions at two of the six border crossings it shares with the small coastal enclave.

The Palestinians, for their part, have rejected an Israeli demand for Hamas and other militant groups in Gaza to disarm.

Hamas' negotiating position has been strengthened by support from the moderate Palestinian President Mahmud Abbas, whose aide, Azzam al-Ahmed, is heading the delegation.

Hamas signed a unity deal with Abbas's Palestinian Authority in April, ending a seven-year rift.

"The Israeli delegation negotiates with us as a Palestinian delegation, but the (Hamas-PA) division is uppermost in their minds," Ahmed said.

"We will defend the Palestinian people's rights as a priority," he added.

Proposal mulled

A member of the Palestinian delegation said on Wednesday that his team was considering an Egyptian proposal, which was tabled on Tuesday.

The Egyptian proposal calls for easing parts of the Israeli blockade of Gaza, bringing some relief to the territory, according to Palestinian officials in the talks. But it leaves the key areas of disagreement, including Hamas' demand for a full lifting of the blockade and Israeli calls for Hamas to disarm, to later negotiations.

The Palestinian negotiator said he had some reservations about the proposal and would try to improve it.

"We would like to see more cross-border freedom, and also to have the question of a Gaza seaport and airport discussed," he said.

The Palestinian officials spoke on condition of anonymity because they were not authorized to discuss negotiations with the media. An Israeli government spokesman had no comment on the negotiations.

AFP-AP