Egypt's Foreign Minister Ahmed Aboul Gheit read Mubarak's statement in Sharm-el-Sheik, Egypt to the council.

Mubarak also renewed Egypt's invitation to the Palestinian Authority and all Palestinian factions to try again to achieve "Palestinian reconciliation," a move considered essential for a settlement of the Israeli-Palestinian conflict.

The Egyptian president said the Israelis and Palestinians should also be willing to discuss border security and other issues that led to the conflict with the Quartet of Mideast peacemakers which includes the U.N., the U.S., the European Union and Russia.

French President Nicolas Sarkozy told reporters at a joint news conference with in Sharm-el-Sheik that he spoke to Israeli Prime Minister Ehud Olmert to inform him of the initiative.

He said Mubarak invited Israel "to come discuss the question of border security ... (and) that could be in the hours ahead."

"I have good hope that the reaction of Israeli authorities will allow us to imagine an end to the operation they have undertaken in Gaza, that is not only a cease-fire but a withdrawal," Sarkozy said.

At U.N. headquarters, French Foreign Minister Bernard Kouchner told members "a halt to violence is the immediate priority."

"We are awaiting the Israeli response and we harbor hope that it will be a positive one," Kouchner said.

In Jerusalem, Olmert's spokesman, Mark Regev, told AP: "We are holding off comments on that for the time being."

U.S. Secretary of State Condoleezza Rice told the Security Council that the United States, Israel's closest ally, understands "the urgency of an end to the fighting" and is working around the clock to achieve it.

"In this regard, we are pleased by, and wish to commend, the statement of the president of Egypt and to follow up on that initiative," Rice said.

But she cautioned that any solution must include an end to Hamas rocket and mortar attacks on southern Israel, the opening of all borders in Gaza, and an end to arms smuggling into the Palestinian territory.

"I express my support for the plan set in motion today by president Mubarak and president Sarkozy," Abbas told the council.

A Hamas delegate who attended talks Tuesday with Egypt's intelligence chief said Hamas representatives would discuss Mubarak's proposals. He did not want to be named due to the sensitivity of the talks.

Israel's U.N. Ambassador Gabriela Shalev defended the country's military action in Gaza, saying Hamas "has no interest in making peace" and only wants to inflict terror on Israel and "tyranny" in Gaza, where its forces hide among innocent civilians.

Associated Press Writers Rebecca Santana and Salah Nasrawi in Cairo, Mark Lavie in Jerusalem and John Heilprin at the United Nations contributed to this report.