War-weary Palestinians have taken to the streets of Gaza to celebrate an apparent breakthrough in ceasefire talks that people hope will bring an end to deadly bombardments.

Earlier, Hamas confirmed it would accept a ceasefire proposal that was being brokered by mediators Qatar and Egypt.

In a brief statement, Hamas political chief Ismail Haniyeh informed mediators that the group would accept their truce terms.

Before Israel responded, news of Hamas’ announcement sent people in Rafah cheering onto the streets.

Details of the proposal were not immediately released.

But in recent days, Egyptian and Hamas officials have said the ceasefire would take place in a series of stages.

Hamas would be expected to release hostages it is holding in exchange for Israeli troop pullbacks from Gaza.

There has been no break to the fighting in Gaza since the last successful ceasefire agreement in November last year, which brought a one-week pause.

However, an Israeli official later on Tuesday morning (AEST) stated that no ceasefire had been agreed in Gaza.

The Israeli official said the proposal Hamas had accepted was a “softened” version of an Egyptian proposal, which included “far-reaching” conclusions that Israel could not accept.

“This would appear to be a ruse intended to make Israel look like the side refusing a deal,” said the Israeli official, who spoke on condition of anonymity.

Palestinians celebrate after the Hamas announcement. Photo: Getty

Israeli Prime Minister Benjamin Netanyahu stated that the ceasefire proposal did not meet his country’s demands. However, Israel would send a working delegation to negotiate.

Netanyahu said Israel’s military would continue its planned campaign in Rafah, the city on Gaza’s southern edge that is the last sanctuary for about half of Gaza’s 2.3 million residents.

Fears had been growing of a full-blown assault in Rafah against Hamas holdouts as the ceasefire talks in Cairo were stalling.

Israel sent flyers and broadcasted messages ordering the evacuation of Rafah head of the planned assault.

Palestinian families began piling children and possessions onto donkey carts, while others left by pick-up or on foot through muddy streets.

“It has been raining heavily and we don’t know where to go. I have been worried that this day may come, I have now to see where I can take my family,” one refugee, Abu Raed, told Reuters via a chat app.

Displaced Palestinians evacuate Rafah by donkey. Photo: Getty

Aid agencies have warned that the evacuation order will lead to an even worse humanitarian disaster in the crowded coastal enclave of 2.3 million people reeling from seven months of war.

“Forcing over a million displaced Palestinians from Rafah to evacuate without a safe destination is not only unlawful but would lead to catastrophic consequences,” British charity ActionAid said.

Israel’s military said it had urged residents of Rafah to evacuate in a “limited scope” operation. It gave no specific reasons nor did it say if offensive action might follow.

Witnesses said the areas in and around Rafah where Israel wants to move people are already crowded with little room for more tents.

Israel has been threatening to launch incursions in Rafah, which it says harbours thousands of Hamas fighters and potentially dozens of hostages.

Victory is impossible without taking Rafah, it says.

The war began after Hamas stunned Israel with a cross-border raid on October 7 in which 1200 people were killed and 252 hostages taken, according to Israeli tallies.

More than 34,700 Palestinians have been killed and more than 78,000 have been wounded in Israel’s assault, according to Gaza’s health ministry.

-with AAP