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Palestinians inspect the rubble of a building following an Israeli air strike near a mosque in the Rafah refugee camp, southern Gaza Strip, on Wednesday. ((Khaled Omar/Associated Press))

Israel and Hamas have agreed to send delegates to Cairo to discuss separately an Egyptian-French truce proposal, Egypt's UN ambassador said Wednesday, as Israeli air strikes on Gaza and Hamas rocket attacks on the Jewish state continued for a 12th day.

Meanwhile, explosions were heard from southern Gaza overnight Wednesday and early Thursday, according to media reports from the Israel-Gaza border, while Arab television station Al Jazeera reported 15 people were injured in a nighttime strike at a mosque.

Israel has barred foreign journalists from entering Gaza, making it difficult to get an accurate picture of the situation in the coastal territory.

The statement by Egyptian Ambassador Maged Abdelaziz came as Israel said it agreed on the "principles" of a ceasefire proposal, while Hamas said there were "positive signs," but no agreement yet.

A delegation from the West Bank-based Palestinian Authority, which is not directly involved in the conflict, will also be sent to Cairo, Abdelaziz said.

"Everybody has agreed to send a technical delegation," he said.

Israel temporarily ceased military operations in the Gaza Strip earlier in the day as part of a plan to halt attacks for three hours each day to allow much-needed aid to pass through an Israeli-controlled corridor.

The military said it initiated the pause at 1 p.m. local time, or 6 a.m. ET. It was the first major concession offered in the conflict on orders from the Israeli government.

Israel first agreed on Tuesday to open the daily supply corridor to move food, fuel and medical supplies into Gaza, whose 1.4 million residents are facing a "full-blown" humanitarian crisis, according to the Red Cross.

Hamas agreed to suspend attacks on Israeli targets during Israel's suspension of military operations, the group's deputy leader, Moussa Abu Marzouk, told Al Arabiya television Wednesday.

Artillery fire had quieted by the start of the short ceasefire, according to reporters on the ground. The buzz of drones and fighter jets resonated in the air as hundreds of Gaza residents took the brief opportunity to shop and visit relatives.

Battles between Israeli forces and Hamas gunmen, however, quickly resumed at the end of the three-hour truce, according to Gaza residents.

"Within minutes of the three-hour lull, really, we started getting reports of fighting," the CBC's Peter Armstrong reported from near the Gaza-Israel border.

"The ground troops were engaging again with militants ... the ground underneath us started shaking with air strikes and as I say, I have two large helicopters hovering overhead right now that appear to be moving back in toward Gaza for another strike."

At least 29 Palestinians were killed during Wednesday's fighting, according to medical officials in Gaza, including four in an Israeli air strike on a car.

Nine Israeli soldiers were lightly wounded during Wednesday's operations, the Israeli military said.

Rice urges Israel to consider truce plan

The short lull took place as diplomatic pressure ratcheted up around the Egyptian-French ceasefire plan, which calls for an end to the rocket attacks on Israel, the opening of Gaza border crossings and an end to weapons smuggling into Gaza.

U.S. Secretary of State Condoleezza Rice, who is at the UN for talks on Gaza, said she urged Israel to consider the Egyptian ceasefire proposal.

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Israeli armoured personnel carriers drive to the Gaza Strip on Wednesday. ((Sebastian Scheiner/Associated Press))

"We believe a ceasefire is necessary but it has to be a ceasefire that will not allow a return to the status quo," said Rice.

The plan seeks to end the Israeli military campaign and suppress Hamas rocket fire.

Israel has said it accepts the principles of the proposal, but said it needs guarantees Hamas will not rearm during the ceasefire period.

"We welcome the French-Egyptian initiative. We want to see it succeed," said Mark Regev, spokesman for Olmert, according to Reuters

Israeli Defence Ministry official Amos Gilad will travel to Cairo on Thursday to hear more about the truce proposal.

Hamas has said it wants border crossings into Gaza reopened. Gaza's Hamas rulers have reportedly been briefed in Egypt by President Hosni Mubarak and are debating the proposal, a Palestinian official told Reuters.

British Foreign Secretary David Miliband said Wednesday he saw the "first glimmerings" of a ceasefire.

Britain, France and the United States were working on a UN Security Council statement expressing support for the Mubarak initiative.

Members of the council were to hold a closed-door session later Wednesday.

Earlier Wednesday, French President Nicolas Sarkozy announced both Israel and the Palestinian Authority, the moderate Palestinian leadership in the West Bank led by Mahmoud Abbas, had accepted the truce proposal. However, the Palestinian Authority is not a direct party to the conflict.

Hamas took power in Gaza in June 2007 after overrunning Fatah forces loyal to Abbas in fierce fighting. The battles led Abbas to dissolve a coalition government between Fatah and Hamas that was created after Hamas's victory in the 2006 Palestinian parliamentary elections.   

Air strikes on tunnels

Also Wednesday, Israel's cabinet decided to hold off on a vote on whether to expand the Gaza operation deeper into Gaza City and other urban centres within the strip.

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Palestinian women from the El Deeb family, who had 10 relatives killed near a United Nations school Tuesday, react during their funeral in the Jebaliya refugee camp, in the northern Gaza Strip, on Wednesday. ((Hatem Moussa/Associated Press))

Israel carried out 40 air strikes Wednesday, including on tunnels used to smuggle weapons into Gaza from Egypt, said Israeli military officials. Residents said 16 houses on the border were destroyed.

Israel also dropped leaflets warning people living around the Gaza-Egypt border area to leave ahead of planned air strikes, said residents.

At least 15 Hamas rockets hit towns in southern Israel. No casualties were reported.

The death toll in Gaza since the Israeli assault began Dec. 27 is now believed to more than 600, with more than 2,500 Palestinians wounded, according to Gaza health officials and UN estimates. It is believed as many as 25 per cent of the people killed were civilians.

Ten Israelis, including three civilians, are reported to have died since the offensive began.

Abbas makes plea to UN

The UN Security Council, which met in New York on Tuesday night to discuss potential diplomatic solutions to the conflict, convened again Wednesday. In an emotional plea to the 15-member council, Abbas urged its members to support the proposed ceasefire plan.

"Do not let one more Palestinian mother cry for her children," he said, according to Reuters. "Put an end to the massacre of my people, let my people live and let my people be free."

UN Secretary General Ban Ki-moon said he will travel to the Mideast next week.

"I intend to travel next week to Israel and the occupied Palestinian territory and to regional capitals. But I do not believe we can wait until then to end the violence, we must achieve that now," said Ban.

"To do so, there must be an immediate ceasefire — durable and respected fully by both sides. Immediate humanitarian measures, including open crossings for humanitarian assistance should be ensured."

The Vatican's justice spokesperson, Cardinal Renato Martino, harshly criticized the Israeli military campaign on Wednesday, calling Gaza "a big concentration camp."

Pope Benedict has made several general appeals for an end to the violence in Gaza but has not openly criticized Israel. The Pope is due to visit Holy Land sites in Jordan, Israel and the Israeli-occupied West Bank in May.

Death toll rises to 40 in UN school attack

The head of the UN agency providing assistance to Palestinian refugees said a relatively small amount of supplies — about 80 trucks worth — was able to cross into Gaza during Wednesday's brief truce, which mostly just allowed Palestinians safe passage to relief stations distributing the aid.

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A Palestinian boy walks on the rubble of a building used by Hamas security forces, destroyed by Israeli forces in Gaza City on Tuesday. ((Khalil Hamra/Associated Press))

"Three hours would be completely inadequate if it was just to get the aid into Gaza," said John Ging, director of the United Nations Relief and Works Agency (UNRWA).

While he praised Israel's decision to institute a daily pause in its offensive, Ging said the move isn't a permanent solution.

"This is the first time in 12 days that these poor people have had a respite from the incessant bombardment," he said.

"It's horrific for the ordinary people here and they don't understand why people are wasting time … to dot i's and cross t's in agreements. They should just continue with cessation, call it whatever they want, and give these people the protection they need."

Many Gazans are living without electricity or running water, and thousands have been displaced from their homes. Hospitals are overcrowded and the UN is urging that patients be allowed to be taken out of Gaza.

The World Bank has warned fuel and electricity shortages have shut down almost all sewage pumps in Gaza, raising the possibility of a health crisis.

Also Wednesday, the UNRWA said the number of people who died during an Israeli attack on al-Fakhora school in Jebaliyah, which was being used as a shelter, had risen to 40.

Christopher Gunness, a spokesman for the UNRWA, said the agency is positive that Hamas militants were not using the UN school to attack Israeli troops, who unleashed tank fire on the building Tuesday morning.

At least 55 people were injured during the attack.

Residents held a mass funeral for the victims in Jebaliyah on Wednesday. The bodies, wrapped in blankets, were laid out in a long row on the ground, with mourners kneeling in prayer before them.

With files from the Associated Press