The Palestinian militant group Hamas said on Friday that it is ready for a ceasefire in Gaza, if Israeli air raids on the territory were stopped.
Dozens of rockets and mortar attacks have been directed at Israel from the Gaza strip, as tensions escalated after the discovery of three Israeli teenagers and a suspected revenge killing which left a Palestinian child dead.
A Hamas source told the BBC that "intensive contacts" between the group and Egyptian officials "succeeded in reaching a new truce between Hamas and Israel, and that the ceasefire agreement was to be announced within hours".
A senior Israeli security official said to the BBC that "the ball is in Hamas' court.
"We informed Hamas that calm will be answered with calm, and if it is not calm, they will be hit hard. The message is very clear and was delivered in a very clear manner. If they took upon themselves a unilateral ceasefire and it is calm, so be it," the official said.
Meanwhile, thousands of mourners have thronged the streets of Jerusalem for the funeral of Muhammad Abu Khdair, the teenager who is suspected to have been killed in a revenge attack, after Israeli authorities handed over the body to his family after Friday prayers.
Palestinian teenager killed, revenge attack suspected (02 July 2014)
Israel launches airstrikes on Gaza after 3 missing teenagers found dead (01 July 2014)