By Nidal al-Mughrabi and Emily Rose, for Reuters
The leader of Hamas said on Tuesday a truce with Israel was close and Israel's prime minister said he hoped for good news soon about hostages, the most optimistic signs so far of a deal to pause the devastating war in Gaza and free captives.
As negotiations appeared to be nearing agreement, however, the fighting on the ground raged on with Israel saying its forces had encircled the Jabalia refugee camp, a major urban flashpoint and Hamas militant stronghold.
The Palestinian news agency said 33 people were killed and dozens wounded in an Israeli air strike on part of Jabalia, a congested urban extension of Gaza City where Hamas has been battling advancing Israeli armoured forces.
In southern Gaza, Hamas-affiliated media said 10 people were killed and 22 injured by an Israeli air strike on an apartment in the city of Khan Younis.
Reuters could not immediately verify the fighting accounts of either side.
If a deal on hostages transpires, it would be the first pause in hostilities and the first mass release of people held by both sides in a six-week-old war that has raised fears of wider conflict in the Middle East.
Hamas leader Ismail Haniyeh said in a statement sent to Reuters by his aide that group officials were "close to reaching a truce agreement" with Israel and the group had delivered its latest response to Qatari mediators.
Israeli Prime Minister Benjamin Netanyahu said, according to remarks released by his office: "We are making progress. I don't think it's worth saying too much, not at even this moment, but I hope there will be good news soon."
US President Joe Biden told reporters that an accord to release some of the more than 200 hostages held by Hamas was very near.
"My team is in the region shuttling between capitals. We're now very close, very close, to bringing some of these hostages home very soon," he said.
Shortly afterwards, US State Department spokesperson Matthew Miller said a hostage deal was close but not final.
Netanyahu summoned his war cabinet amid growing signs of a deal to free a number of the 240 hostages taken by Hamas militants to Gaza after their deadly cross-border raid into Israel on 7 October, which triggered the war.
A US official briefed on the discussions facilitated by Qatar said Hamas would free about 50 hostages, mostly women and children and including some foreigners, while Israel frees 150 Palestinian prisoners, with fighting paused for four to five days.
Israeli media outlets said later the government had convened to discuss approval of a deal.
A Hamas official told Al Jazeera TV earlier that negotiations were centred on how long the truce would last, arrangements for delivery of aid into Gaza and details of the exchange of captives. Both sides would free women and children, and details would be announced by Qatar, which is mediating in the negotiations, said the official, Issat el Reshiq.
Israel's chief military spokesperson, Rear Admiral Daniel Hagari, said the army was focused on fighting and the deal with Hamas, if clinched, would not affect its gains in Gaza, where Israel says it now controls much of the north.
"The military will know how to maintain its military achievements in Gaza while preparing for the next stages of the war," Hagari told a televised briefing on Tuesday evening.
He said Israeli forces had continued operations through the day in Gaza and completed an encirclement of Jabalia, "which is a significant combat area", adding that troops had also "deepened combat" in the nearby Zeitoun district of Gaza City.
Hamas' 7 October rampage into Israeli communities near Gaza killed 1200 people, according to Israeli tallies, the deadliest day in Israel's 75-year-old history. In Israel's subsequent aerial blitz and invasion of Gaza to try to annihilate Hamas, the enclave's government says at least 13,300 Palestinians have been confirmed killed, including at least 5600 children.
Rain and cold worsen conditions
Around two-thirds of Gaza's 2.3 million people have since been made homeless, with thousands a day trekking south on foot with belongings and children in their arms. The central and southern parts of the enclave, where Israel has told them to go, have also regularly come under attack.
A day and a night of rain and cold winter weather worsened the dire conditions in the Gaza Strip for the displaced, many thousands of whom are sleeping rough or in makeshift tents.
Gaza health authorities said earlier on Tuesday at least 20 Palestinians were killed in an Israeli bombing of the Nuseirat refugee camp in central Gaza at midnight. There was no immediate comment from Israel.
The already crowded Nuseirat district, which grew out of a camp for Palestinian refugees from the 1948 Israeli-Arab war, is just south of wetlands that bisect the narrow, coastal strip and has been the arrival point for huge numbers escaping the fighting in the urbanised north.
Israeli bombing in southern areas leaves Gazans fearing they have no place safe to go. Neighbouring Egypt has allowed the evacuation of some wounded and foreign passport holders, but says it will not accept a forced, mass exodus.
Miller, the US State Department spokesperson, said Washington was having "fairly detailed conversations" with Israel about what steps it could take to avoid harming civilians and ease aid deliveries if it goes ahead with an anticipated extension of its military campaign into south Gaza.
Despite an Israeli order to flee for their own safety, tens of thousands of civilians are believed to remain in north Gaza - wide swathes of which Israel says its forces now control but where Hamas militants, deeply embedded within the population, are waging guerrilla-style war in fiercely contested pockets.
All hospitals in the north have ceased functioning normally, many still housing patients and displaced Gazans. Israel says Hamas uses hospitals as cover for its combatants, which Hamas and the hospitals deny.
The World Health Organisation said it was working on plans to evacuate three Northern Gaza hospitals: Al Shifa, Al Ahli and the Indonesian Hospital, lamenting this as a last resort.
This story was originally published by Reuters.