Palestinian factions behind rocket attacks on Israel signalled softer terms for a truce yesterday, giving Israel 48 hours in which to agree to a mutual cessation of violence in the Gaza Strip, a Palestinian official said.

Hamas and other militant groups had previously conditioned ending a two-week-old surge of fighting in and around the Gaza Strip on Israel agreeing to a simultaneous ceasefire in the occupied West Bank. Israel had rejected such calls as a ruse.

An official privy to talks between the factions and aides to moderate President Mahmoud Abbas said they tended to agree to what would effectively be a renewal of a Gaza ceasefire that he and Israeli Prime Minister Ehud Olmert declared in November.

"The next 48 hours will be decisive to determine which way the factions are going and it is pending on Israel and whether it wanted to stop its aggression," said the official, who declined to be named given the sensitivity of the negotiations.

The militants denied there had been a commitment, saying only that they were weighing a proposal made by Mr Abbas for a trial month-long truce in Gaza.

"Our position is that a ceasefire must be mutual, smiltaneous and reciprocal and it must cover Gaza and the West Bank in the same time," said Hamas spokesman Ayman Taha.

"Despite our position, we have told Abu Mazen (Abbas) that we will study his offer and inform him of our response in the near future," he said.

Israeli officials were not available to comment on the reported breakthrough in the internal Palestinian talks, which took place even as Israel pressed a campaign of air strikes.

Two Hamas militants died when missiles struck their car in the Gaza Strip, hospital officials said. Other strikes targeted positions used by Hamas and another group, Islamic Jihad.

During the current cross-border violence, Israel has rebuffed calls for a ceasefire, instead campaigning for international pressure on the Hamas-led government to back down.

There has been talk of dispatching foreign peacekeepers to Gaza.

The November truce did not apply to the West Bank, where Israel has mounted frequent and often bloody raids. It has said the operations were needed to thwart planned militant attacks.

The Palestinian truce efforts underscore the precariousness of a power-sharing deal between the governing Hamas Islamists and Abbas's rival Fatah faction, which only recently ended a spate of street battles stoked by political deadlock. Abbas wants calm in hope of restarting peace negotiations with Israel, but cannot afford to appear an Israeli stooge.

Hamas, for its part, does not recognise the Jewish state, yet is aware that the latest round of fighting has deepened Palestinian rancour at the government, already crippled by a Western aid embargo imposed in hope of forcing rapprochement.

Mr Abbas has called the rockets "pointless" and "needless". A Hamas official, Nizar Rayyan, said before yesterday's talks that "Abbas hates rockets just like we hate the Jews."

Israel's air strikes have killed at least 38 people, of which militant groups say 25 were fighters. Israeli troops also arrested the Palestinian education minister, who is from Hamas, and 32 other officials in the West Bank on Thursday - a move that raised concerns in Washington and at the United Nations.

More than 150 have been fired in the past two weeks, ending six months of relative calm. One killed an Israeli woman this week in the town of Sderot.

Representatives of Fatah and Hamas may also meet Egyptian mediators separately in Cairo in the coming days, Palestinian and Egyptian officials said.

A Fatah delegation is due there today and a Hamas spokesman said it would also be prepared to meet Egyptian officials if a formal invitation was sent.

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