A humanitarian truce in the Gaza Strip ended early Sunday and fighting resumed, but Hamas now says it will observe a 24-hour ceasefire to allow Palestinians to prepare for Eid al-Fitr, marking the end of the holy month of Ramadan.

'Almost everybody has close to zero electricity, water is a major issue ... You're not able to leave your home. You never know when a missile will strike.''- Jason Shawa, Gaza resident and business owner

However, Israel is questioning whether Hamas is serious about its own ceasefire, and Prime Minister Benjamin Netanyahu claims it has already been violated.

"It is a chance for people to check out their properties, to buy goods, sweets, candies or toys for their children," freelance reporter Yousef al-Helou told CBC News.A spokesman for Hamas announced the truce would start at 2 p.m. local time. There has been no reported response from the Israeli military.

A 12-hour truce that Israeli officials wanted to extend in the Gaza Strip collapsed on Sunday after a barrage of rockets fired by Palestinian militants was met with fierce Israeli shelling, in a fresh setback to efforts to secure a permanent ceasefire.

U.S. President Barack Obama, speaking by phone on Sunday with Israeli Prime Minister Benjamin Netanyahu, stressed the need for an immediate, unconditional humanitarian ceasefire in Gaza, the White House said.

Urging a permanent end to hostilities on the basis of the 2012 ceasefire agreement, Obama added that "ultimately, any lasting solution to the Israeli-Palestinian conflict must ensure the disarmament of terrorist groups and the demilitarization of Gaza."

Palestinian witnesses reported heavy shelling east of Gaza City, with ambulances immediately racing toward the area. At least three deaths were reported in separate strikes.

"Although there may be talk of a ceasefire ... I've seen no sign of that here on the ground in Gaza," said CBC's Derek Stoffel.

He said he heard an "intense bombardment by Israeli forces" while taking a bus through Gaza City on Sunday, "most likely from the tanks we've just seen near the border area.

"People are not really feeling safe enough to venture out onto the streets, even though they're hearing on the radio, talk of these humanitarian pauses... The streets are deserted."

Gaza resident speaks to CBC

For Gaza residents like business owner Jasan Shawa, life has been difficult from several perspectives.

He told CBC on Sunday that many residents are without supplies and clean water, while many businesses have shut down.

"It's very difficult for most people," he said. "Almost everybody has close to zero electricity, water is a major issue ... You're not able to leave your home. You never know when a missile will strike. ... And nobody is safe really."

He added: "Nobody conducts any business since this attack started. We closed our printing company. ... The only business operating now are bakeries basically."

Tanks are pressing farther into the Gaza Strip, along with bulldozers and digging equipment as Israeli troops search for Hamas tunnels.

Israel and Hamas agreed to the temporary, 12-hour ceasefire on Saturday. The Israeli security cabinet decided to extend the quiet until midnight on Sunday, on condition that its forces could continue to track down and destroy militant tunnels that crisscross the Gaza border.

But Hamas rejected the proposal and said its forces would keep fighting as long as Israeli troops remained in Gaza. Those troops remained active in Gaza during the truce, continuing to search for tunnels leading from Gaza into Israel.

Earlier, militants rejected four-hour extension of the truce, initially set to expire at 8 p.m. local time Saturday. Israeli officials later withdrew the proposed extension of the truce after militants fired about 12 rockets at southern Israel.

Netanyahu told CNN: "Hamas doesn't even accept its own ceasefire; it's continuing to fire at us as we speak."
 
Netanyahu added that Israel "will take what ever action is necessary to protect our people."

At least 1,050 Gazans — mostly civilians — have been killed in 20 days of fighting. An Israeli soldier was also killed overnight by cross-border mortar fire, bringing the army death toll to 43 soldiers, with three civilians killed in Israel by rocket and mortar attack.

The Israeli military said on Sunday that following "Hamas's incessant rocket fire" during the unilateral Israeli extension of the truce, it would resume targeting Gaza militants.

Even before the truce broke down, some Israeli ministers signalled that a comprehensive deal to end the conflict with Hamas and its allies was remote.

Gazans had earlier taken advantage of the lull in fighting to recover their dead and stock up on food supplies, flooding into the streets after the ceasefire began at 8.00 a.m. local time to discover scenes of massive destruction in some areas.

Mideast Israel Palestinians

A Palestinian woman grieves during the funeral of Eid Fadhelat, 32, who was shot during clashes with Israeli soldiers at al-Arrub refugee camp near Hebron city in the West Bank. (Nasser Shiyoukhi/Associated Press)

Gaza Health Ministry spokesman Ashraf Al-Qidra said rescue teams had retrieved 132 bodies from wrecked neighbourhoods.

The man killed by tank fire brought the number of Palestinian fatalities to 1,033 since July 8 when Israel launched its offensive, aimed at ending rocket fire out of Gaza.

Israel said five more of its soldiers were killed in pre-truce fighting in Gaza, bringing the army death toll to 40 as troops battled militants in the tiny Mediterranean enclave that is home to 1.8 million Palestinians.

Three civilians, including two Israeli citizens and a Thai labourer, have been killed by rockets fired from Gaza.

East Jerusalem, West Bank violence

Israel's and Hamas's positions regarding a long-lasting halt to hostilities remained far apart.

Hamas wants an end to an Israeli-Egyptian blockade of Gaza. Israeli officials said any ceasefire must allow the military to carry on hunting down Hamas's tunnel network that criss-crosses the Gaza border.

Israel says some of the tunnels reach into Israel and are meant to carry out attacks on Israelis. Other underground passages serve as weapon caches and Hamas bunkers. The military said it had uncovered four such tunnel shafts inside Gaza on Saturday.

With files from The Associated Press and CBC News