Israel signalled it was winding down the 25-day-old Gaza war unilaterally, saying yesterday it would not attend Egyptian-hosted negotiations for a new truce and giving Palestinians who had fled fighting in one northern town the all-clear to return.

But shelling exchanges continued, with Palestinian officials saying Gaza’s mostly civilian death toll rose to 1,665 and Israel saying its Iron Dome interceptor shot down rockets launched at the cities of Tel Aviv and Beersheba.

Several ceasefires between Israel and the Gaza Strip’s dominant Islamist Hamas faction had failed to take hold or quickly collapsed, most recently on Friday after two Israeli soldiers were killed and a third went missing in an ambush.

Shelling exchanges continued, civilian death toll rose to 1,665

Israel accused Hamas of seizing lieutenant Hadar Goldin and the US blamed the group for a “barbaric” breach of the truce. The UN was more guarded in its censure of Hamas but urged Goldin’s immediate release.

Seeking to shift responsibility, Hamas said it believed its gunmen had struck before Friday’s ceasefire began and that if they captured Goldin, he probably died with his captors in heavy Israeli barrages that followed.

A Palestinian delegation was to fly to Cairo for new truce negotiations, which would include Hamas’s demand that Egypt ease movement across its border with blockaded Gaza. But Israel said it would not send its own envoys as scheduled yesterday.

“Hamas is hoodwinking the international community again and again,” an Israeli official said. “It is not interested in an accommodation (with Israel).”

Israel launched a Gaza air and naval offensive on July 8 following a surge of cross-border rocket salvoes by Hamas and other Palestinian guerrillas, later escalating into ground incursions centred along the infiltration tunnel-riddled eastern frontier of the enclave but often pushing into urban areas.

With US backing, Israel had said that with or without a truce its forces would pursue their main mission of hunting tunnels used by Hamas for several cross-border attacks. More than 30 of these, and dozens of access shafts, have already been unearthed and were being blown up, the military said.

“Our understanding is that our objectives, most importantly the destruction of the tunnels, are close to completion,” a military spokesman, Lieutenant-Colonel Peter Lerner, said.

Crowded Gazan towns close to the Israeli border have seen devastating clashes, and the flight of tens of thousands of Palestinians, as tanks and troops swept in to confront dug-in guerrillas after the army warned civilians to evacuate.

Israel said yesterday that evacuees from Beit Lahiya, a northern town with a population of 70,000, could go back home.

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