The skies over Gaza remained calm on the second day of a 72-hour truce as negotiators in Cairo prepared to tackle the thorny issue of the Israeli blockade.
As Gaza's residents ventured out to try to piece together their battered lives, Israeli and Palestinian negotiators were to sit down for a second day of indirect talks aimed at finding a durable end to the five-week confrontation.
But a senior Israeli official said there had been no progress so far, saying there was still a long way to go to reach an agreement to end the conflict, which erupted on July 8 when Israel launched military operations to halt cross-border rocket fire from Gaza.
The fighting has claimed the lives of 1940 Palestinians, mostly civilians, and 67 people on the Israeli side, most of them soldiers.
"The gaps are still very wide. There has not been progress in the negotiations," the official said, speaking on condition of anonymity.
A first day of talks on Monday had lasted nearly 10 hours, a Palestinian official said in Cairo, describing the negotiations as "serious" but saying Tuesday's meetings would be crucial.
Israel had insisted on the demilitarisation of Hamas, the de facto power in Gaza, but the Palestinians had refused, he said.
"(Tuesday's) meeting should be the most important," he said, adding that the talks would tackle core issues such as Israel's eight-year blockade of Gaza, which the Palestinians want lifted.
Talks are expected to resume around noon (1900 AEST) and last into the evening, another Palestinian official said.
Hamas wants Israel to lift the blockade it imposed on Gaza in 2006 before it will stop rocket attacks. Israel has said it will only facilitate Gaza's reconstruction if the enclave is fully disarmed.
In the north of the tiny Gaza Strip, which has a crowded population of 1.8 million, several families could be seen picking through the rubble of their badly-damaged homes not far from the Erez crossing.
As residents of one apartment uncovered remains of a large missile, others outside brewed coffee on a fire made with paper and wood collected from the ruins. Some even brought breakfast, clearing a space to sit and eat among piles of rubble, broken furniture and twisted steel.
"Every day we come here, we sit a little and then we go," said Mohamed Gamar, who is staying with relatives due to the overcrowding in UN schools where hundreds of thousands have sought refuge from the fighting.
Egypt, which brokered the three-day truce, has urged the warring sides to make every effort to reach "a comprehensive and permanent ceasefire".
Efforts to extend a similar 72-hour lull last week shattered after Hamas refused to hold its fire beyond the deadline, accusing Israel of refusing to lift the blockade.
Both sides said they were ready to resume hostilities if the talks failed again.
"In the case of Israeli procrastination or continued aggression, Hamas is ready with other Palestinian factions to resist on the ground," its exiled leader Khaled Meshaal told AFP in Doha at the weekend.
And Israeli Intelligence Minister Yuval Steinitz warned that without a reasonable outcome to the talks, there could be another ground operation in Gaza.
"Either there will be a reasonable resolution of the situation in Gaza, or, if the fire resumes, we will have to consider .. an expansion on the ground, overthrowing the Hamas authorities and the demilitarisation of Gaza by ourselves," Steinitz told army radio.
Finance Minister Yair Lapid said he was pushing for an international conference on Gaza's future that would involve regional players as well as Washington, the European Union and moderate Arab states such as Saudi Arabia.
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