Egypt has proposed a ceasefire between Israel and Palestinian militants in Gaza that would start on Tuesday, ending a week of cross-border warfare, and be followed by talks to prevent further hostilities.

Israeli Prime Minister Benjamin Netanyahu planned to convene his decision-making security cabinet on Tuesday to discuss the proposed truce, an Israeli official said.

The official appeared to put a positive spin on the Egyptian initiative, saying Hamas had been weakened military by Israeli air and sea bombardments.

Hamas's initial reaction was more dismissive.

Sami Abu Zuhri, a Hamas spokesman in Gaza, said the Islamist group had not received an official ceasefire proposal, and he repeated its position that demands it has made must be met before it lays down its weapons.

"Such a proposal was not presented to us so that we can study and it, and therefore it does not commit us to doing anything," he said.

In Washington, UA President Barack Obama said he was encouraged by Egypt's proposal for a ceasefire and sided with Israel against what he called "inexcusable attacks."

Obama's comments came as he presided over an annual Iftar dinner at the White House in celebration of the holy month of Ramadan.

In remarks to dinner guests, who included diplomats from the Arab and Muslim world, Obama said the US goal continued to be peace and security for Israelis as well as Palestinians.

"Now I will say very clearly, no country can accept rockets fired indiscriminately at citizens. And so we've been very clear that Israel has the right to defend itself about what I consider inexcusable attacks from Hamas," he said.

At the same time, he added: "The death and injury of Palestinians civilians is a tragedy, which is why we've emphasized the need to protect civilians regardless of who they are and where they live."

Gaza health officials said at least 180 Palestinians, many of them civilians, have been killed in the worst flare-up of Israeli-Palestinian violence in two years.

There have been no fatalities in Israel, largely due to its Iron Dome anti-missile system, but the frequent rocket salvoes have disrupted life and sent hundreds of people racing to shelters.

Under the proposal announced by Egypt's Foreign Ministry "de-escalation arrangements" would take effect at 0600 GMT on Tuesday, pending implementation of a full ceasefire within 12 hours of that time.

High-level delegations from Israel and the Palestinian factions would hold separate talks in Cairo within 48 hours to consolidate the ceasefire and conclude "confidence-building measures."

The Arab League said in a statement it welcomed the Egyptian initiative "to protect the lives of the innocent."

Palestinian President Mahmoud Abbas, who reached an agreement with Hamas in April that led to the formation of a unity government last month, welcomed the proposal and urged its acceptance, official Palestinian news agency Wafa said.

US Secretary of State John Kerry will hold talk with Egyptian officials in Cairo on situation on Tuesday, Egypt's state news agency said.

Hours before the proposal was announced, Gaza militants resumed rocket attacks on Tel Aviv after a 24-hour lull, while Israel kept up its strikes in the Gaza Strip and deployed infantry and armour along the frontier.

Israel, late on Monday bombed the house of Marwan Issa, a top commander of Hama's armed wing, in Bureij refugee camp. There were no immediate reports of casualties.

HAMAS DEMANDS

The surge in hostilities over the past week was prompted by the murder last month of three Israeli teenagers in the West Bank and the revenge killing on July 2 of a Palestinian youth in Jerusalem. Israeli officials said on Monday three people arrested over the Palestinian's death had confessed to burning him alive.

Hamas leaders have said a ceasefire must include an end to Israel's blockade of the coastal territory and a recommitment to a truce reached in an eight-day Gaza war in 2012.

In addition, Hamas wants Egypt to ease restrictions at its Rafah crossing with the Gaza Strip imposed after the military toppled Islamist president Mohamed Mursi last July. But the proposal made no mention of the Rafah crossing or when any restrictions would be eased. It said only that "crossings shall be opened and the movement of persons and goods through (them) shall be facilitated once the security situation becomes stable on the ground."

Hamas has faced a cash crisis and Gaza's economic hardship has deepened as a result of Egypt's destruction of cross-border smuggling tunnels. Cairo accuses Hamas of aiding anti-government Islamist militants in Egypt's Sinai peninsula, an allegation the Palestinian group denies. - Reuters