Good news in the making?

Israeli ministers are due to vote on a unilateral ceasefire proposal, amid signs of diplomatic movement on the three-week conflict in Gaza.

Government spokesman Mark Regev said he thought Israel may have achieved enough to allow a ceasefire.

Israel and the US signed a deal to halt the smuggling of arms into Gaza as Cairo continued its mediation efforts.

Israeli warplanes bombed Gaza again just before dawn, with heavy explosions south of Gaza City.

The Israeli prime minister’s office said that as a result of “significant progress” at talks between Israeli officials and Egypt’s intelligence chief, Omar Suleiman, a draft unilateral ceasefire would be discussed by Mr Olmert and his Defence Minister, Ehud Barak.

Hamas leaders have returned to Cairo for further talks.

They insist that a ceasefire agreement is built on the withdrawal of Israeli forces from Gaza within a week and an immediate end to the blockade of the Gaza Strip.