Ban, the U.N. chief, called for intensified negotiations "to provide arrangements and guarantees in order to sustain an endurable cease-fire and calm." Ban is scheduled to arrive in Israel on Thursday.

Ghazi Hamad, a Hamas spokesman, said he believed there was room for compromise.

"I am optimistic now because I think there is no other choice for us," he told the British Broadcasting Corp., suggesting there could be reconciliation down the road with the rival Palestinian administration run by Palestinian President Mahmoud Abbas.

One of the main issues has been the Rafah crossings from Egypt into Gaza, which Israel says are a main transit point for weapons and ammunition into Gaza.

"We want to reach a compromise which can allow the Rafah crossings to work as well and to allow for export and import and for the traveling of people," said Hamad.

Israeli military officials have said talks in Cairo will determine whether Israel moves closer to a truce with Hamas or widens its offensive to send thousands of reservists into crowded, urban areas where casualties on both sides would likely mount.

Israel again postponed plans to send its lead negotiator, Amos Gilad, to Cairo on Thursday, defense officials said. They spoke on condition of anonymity because the date of his departure has not been set.

Egyptian Foreign Minister Ahmed Aboul Gheit said Hamas had offered its own proposal to end the fighting.

"We will keep it under a lid of secrecy until we reach a cease-fire agreement that is followed by several interrelated steps to reach a cease-fire, ensure withdrawal (of the Israelis) open the crossing and secure the return of the monitors."

Israel is trying to keep up the pressure on Hamas to accept Israel's truce terms: A complete cessation of violence from Gaza and international guarantees of a halt in the smuggling of weapons into Gaza through the porous Egyptian border.

Hamas, which is backed by Iran, cannot hope to score a battlefield victory over the powerful Israeli military, but mere survival could earn it political capital in the Arab world as a symbol of resistance to the Jewish state. Lebanon's Hezbollah, another Iran-backed group, largely achieved that goal in its 2006 war with Israel.

Palestinian rocket fire has dropped off dramatically since the offensive began. Twelve rockets were fired at Israel on Wednesday, down from as many as 80 a day early in the operation.

Overnight, Israeli warplanes and helicopter gunships pounded a police court in Gaza City, rocket-launching sites, gunmen, weapons-production and storage facilities and about 35 weapons smuggling tunnels, the military said. Later in the day, witnesses in southern Gaza reported air strikes on the house of a rocket squad leader and a militant's car.