Israeli and Palestinian negotiators in Cairo are facing a new midnight deadline to end the bloodshed in Gaza after agreeing to extend an existing truce by 24 hours.

News of the last-minute extension was confirmed by both sides shortly before a five-day ceasefire was to expire at midnight local time (0700 AEST Tuesday).

Egyptian mediators have been pushing both sides to put a decisive end to weeks of bloodshed in Gaza, which has killed more than 2000 Palestinians and 67 on the Israeli side.

The talks in Cairo centre on an Egyptian proposal that meets some of the Palestinian demands, such as easing Israel’s eight-year blockade on Gaza, but defer debate on other thorny issues until later.

The aim is to broker a long-term arrangement to halt more than a month of bloody fighting, although both sides have largely silenced their guns since August 4 thanks to a series of temporary truces.

“We must take advantage of every minute in the next 24 hours until we reach an agreement or the cycle of violence will continue,” Azzam al-Ahmad, head of the Palestinian delegation, told reporters in Cairo on Tuesday.

The delegations were expected to resume talks at midday, an official said.

Although the back-to-back truce agreements have brought relief to millions on both sides of the border, the drawn-out waiting and the fear of a resumption of fighting was beginning to test people’s patience.

“No one here has any hope,” said Riyad Abul Sultan, a father-of-10, smoking as he sits on a flimsy mattress at a UN school in Gaza.

“Maybe they’ll finish the war for two hours, maybe Israel will start bombing again.”

“We want a ceasefire for always, not for three days,” agreed his wife, Wafa.

The warring parties are once again faced with three choices – either they reach a long-term agreement, accept a further extension or risk a resumption of the fighting.

On Monday, a senior member of the Palestinian delegation insisted there had been “progress” on agreeing a more durable ceasefire, with both sides demonstrating “a great degree of flexibility”.

Hamas, which is part of the Palestinian delegation alongside Islamic Jihad, blamed Israel for drawing out the talks.

Hamas had repeatedly warned it would not extend the temporary ceasefire again, pressing for immediate gains that would allow it to claim concessions from Israel after the devastating four-week war, which began on July 8.

But a senior official within the Palestine Liberation Organisation (PLO) said the Islamist movement appeared to have changed its position following a meeting at the weekend between exiled Hamas leader Khaled Meshaal and senior Palestinian official Saeb Erakat.

The Egyptian proposal calls for both sides to immediately cease fire, and includes provisions relating to opening the borders to allow for free movement of people, goods and construction materials, as well as a clause on regulating the financial crisis within the enclave.

But crucially, it postpones discussions on the thorniest issues, such as a port and airport in Gaza, for another month “after calm and stability returns,” along with talks over exchanging the remains of two Israeli soldiers for the release of Palestinian prisoners.

Monday’s deadline marked the end of the third temporary ceasefire in a fortnight.

As diplomatic efforts intensified, Gaza’s health ministry said the death toll rose to 2,016 people with 10,196 wounded. Among the dead were 541 children, 250 women and 95 elderly men.