Hamas's government in Gaza began its first week back in business Sunday, operating from makeshift offices because most administrative buildings were bombed, as the Palestinian militant group prepared for new talks with Egypt on consolidating the weeklong ceasefire with Israel.

The group said it would be distributing $52 million US in aid to people affected by Israel's three-week offensive against Hamas, which devastated Gaza.

The cash compensations for lost relatives or damaged homes would come from its own funds, Hamas said, until relief pledged by international donors can come in. Hamas receives millions in funding from Iran and donations from supporters around the world, believed to be smuggled into the blockaded territory through tunnels.

Some Hamas aid has already been passed out in a few cases in recent days, but Hamas said its formal distribution was beginning Sunday.

Top Hamas leaders remained in hiding, apparently still fearing an Israeli strike despite the ceasefire. But lower-level Hamas officials could be seen back to work on Sunday, sometimes operating outside from a table set next to the rubble of their destroyed offices.

Early in the morning, the Hamas national security chief, Gen. Hussein Abu Athra, was signing orders on the hood of his car next to the pummelled historic building that had served as security headquarters.

A Hamas delegation was due to start talks with Egyptian officials on Sunday on means to reopen the border, largely closed since the group consolidated its control in Gaza in June 2007, after winning Palestinian legislative elections in January 2006.

The border issue is key to preserving the ceasefire, and Israel, the United States and Egypt are trying to work out security arrangements to ensure Hamas does not smuggle weapons into the strip before any opening.

Hamas seeks end to blockade

Hamas spokesman Fawzi Barhoum said discussions would address a detailed ceasefire agreement.

"We are not going to accept less than opening the borders ... and lifting the sanctions," Barhoum told the Associated Press on Sunday.

"We reject an open-ended ceasefire, but temporary calm with guarantees can be discussed," he also said, without specifying how long. A low-level delegation from Hamas's rival, Palestinian President Mahmoud Abbas's West Bank-based government, was also in Cairo for talks, but was not expected to meet with the Hamas envoys.

In the new U.S. administration's first direct foray into peace efforts, President Barack Obama's top Middle East envoy is due in Israel on Wednesday for talks with Israeli and Palestinian leaders in the West Bank, an Israeli Foreign Office official said.

The official said George J. Mitchell's talks would focus on ensuring an arms blockade on Hamas and on reviving broader peace negotiations. Diplomats in Washington said he would also discuss improving the humanitarian situation in Gaza. The official and diplomats spoke on condition of anonymity because Washington has not officially announced Mitchell's visit.

International aid organizations and the United Nations say the priority of truce talks must be to ensure the reopening of Gaza to provide relief and reconstruction help for the 1.4 million people trapped inside.

First estimates show Gaza suffered about $2 billion in damages during the Israeli air strikes and ensuing ground offensive.

'It's all rather simple'

Israel has been allowing some supply convoys into Gaza, though its borders remain largely closed. The Israeli military says more than 125 trucks a day — on some days nearly 200  — have entered Gaza since fighting ended on Jan. 17, but aid workers say the numbers are not enough.

John Ging, head of the UN agency providing help for Gazans, UNRWA, said diplomatic talks should not preclude on letting aid reach Gaza.

"It's all rather simple actually," Ging said in an AP interview late Saturday. "Open up the crossing points and I'm absolutely confident that you'll see not just a positive development for the people ... but a positive development in their mindsets as well, which will make political problems easier to solve," Ging said.

"Change has come to the United States, let's have some change here for the people in Gaza."

Israel launched its 22-day offensive in a bid to halt Hamas rocket fire on southern Israel.

The assault killed 1,285 Palestinians, most of them civilians, the Palestinian Center for Human Rights counted. Thirteen Israelis, including three civilians, were also killed during the fighting, Israel said.

Israel's cabinet was due to vote Sunday on a measure ensuring the government will provide "moral and legal support" for military officers in potential court cases related to the war's conduct.

"Israel will give 100 per cent backing to those who acted in its name and on its behalf. The justice minister will give legal responses to all the self-righteous, sanctimonious types who would sue our soldiers and officers," Prime Minister Ehud Olmert said at the start of the cabinet session.

Israeli, Palestinian and international human rights groups have said they are seeking to build a case that Israel violated the laws of war.

The groups are focusing on suspicions that Israel used disproportionate force in its onslaught and failed to protect civilians.