Mediators worked against the clock yesterday to extend a truce between Israel and Pales-tinian militants in Gaza, as the three-day ceasefire went into its final 24 hours.

Israel said it was ready to agree to an extension as Egyptian mediators pursued talks with Israelis and Palestinians on ending a war that has devastated the Hamas-ruled enclave. Palestinians want an Israeli-Egyptian blockade of Gaza to be lifted and prisoners held by Israel to be freed. “Indirect talks are ongoing and we still have today to secure this,” an Egyptian official said when asked whether the truce was likely to go beyond today.

“Egypt’s aims are to stabilise and extend the truce with the agreement of both sides and to begin negotiations towards a permanent agreement to cease fire and ease border restrictions.”

The Palestinian delegation was expected to meet Egyptian intelligence officials late on Thursday evening. After a month of bitter fighting, the two sides are not meeting face to face.

Gaza officials say the war has killed 1,874 Palestinians, most of them civilians. Israel says 64 of its soldiers and three civilians have been killed since fighting began on July 8, after a surge in Palestinian rocket salvoes into Israel.

An Israeli official said late on Wednesday that Israel “has expressed its readiness to extend the truce under its current terms” beyond Friday morning’s expiry of the three-day deal, which took effect on Tuesday and has so far held. A senior Israeli minister, Yaakov Peri, said on Army Radio that an extension would be “right for both sides” and added: “Let’s hope that reason prevails.”

In Gaza, Palestinian factions held a rally, with several thousand supporters urging Hamas to “bomb Tel Aviv”.

Mushir Al-Masri, a Hamas official, told the crowd that Israel should know that “our fighters are in the battlefield with their fingers on triggers”.

A senior official with Hamas’s armed wing has threatened to quit the talks in Cairo unless progress is made towards meeting the group’s demands. A Hamas source said it was ready to resume fighting once the truce ended if its demands were not met.

Hamas insists demands must be met or fighting could resume

A Hamas refusal to extend the ceasefire could further alienate Egypt, whose government has been hostile to the group and which ultimately controls Gaza’s main gateway to the world, the Rafah border crossing.

Israel’s armed forces chief, Lieutenant-General Benny Gantz, said that if Hamas broke the truce, Israel would use “whatever force necessary to ensure the security of Israeli citizens”.

A senior Israeli military officer, briefing foreign reporters, said it could take “months” for Hamas and other Palestinian groups to rebuild their domestic rocket production capacity.

“They started with around 9,000 rockets (in their total arsenal) and now they have a bit less than 3,000,” the officer said. “The majority are short-range, less than 40 km.”

Finance Minister Yair Lapid said Israel’s 2014 budget could absorb the cost of the conflict without raising taxes.