The Israeli security cabinet is to convene Saturday to decide on an Egyptian proposal for a ceasefire in the Gaza Strip, while Israeli bombardment was continuing on Friday.

Israel now is under huge pressure as feverish diplomacy in the past week calls for an immediate ceasefire in Gaza, where more than 1,150 Palestinians have been killed and thousands wounded in three weeks of war.

The Israeli cabinet will examine the result of negotiations in Cairo with Egyptian officials, Israeli Foreign Ministry spokesman Yigal Palmor told Xinhua late Friday.

Based on the examination, the cabinet will decide whether to continue the negotiations or accept the Egyptian proposal as it is, Palmor said.

Israel said on Friday its military actions could be "in the final act." "Hopefully, we're in the final act," Olmert's spokesman Mark Regev said.

Meanwhile, Israeli prime minister's office released a statement saying "significant progress was made during talks Israeli officials held with the Egyptian intelligence chief."

The statement was released shortly after Amos Gilad, head of the Israeli Defense Ministry's Diplomatic-Security Bureau, returned home from Cairo and briefed Defense Minister Ehud Barak on the discussions.

Asked about a report by local daily Ha'aretz that Israeli cabinet will vote on Saturday over whether to enact a "unilateral ceasefire" with Hamas in Gaza, Palmor said "I can not confirm the report at this point."

Earlier, Ha'aretz reported the news on its website, saying the decision would mean Israel has decided to end the operation without an agreement with Hamas, relying instead on the support of the United States and Egypt in battling arms smuggling.

Egypt, which has been active in mediating a end of hostilities between Hamas and Israel, has insisted on a ceasefire deal between the two sides.

President Hosni Mubarak has presented a three-point proposal, that calls for an immediate ceasefire for a limited period to allow humanitarian aid to reach Gaza, home to 1.5 million Palestinians, and give Egypt time to continue its efforts to help reach a lasting truce.

Egypt would invite both Israel and the Palestinians for negotiations and help resume inter-Palestinian reconciliation talks, according to the proposal.

So far, Hamas and Israel have both responded positively to the proposal, but neither has accepted it.

Khaled Meshaal, exiled head of Hamas, told Arab leaders Friday the Islamist movement would not accept any ceasefire that did not provide for a full Israeli pullout and the opening of Gaza's borders.

"We will not accept Israel's conditions for a ceasefire," he said.

Meanwhile, Palestinian militants in Gaza fired over 20 rockets and mortar rounds into southern Israel on Friday, wounding five people, the Israeli side said.

Also on Friday, the United States and Israel signed in Washington a memorandum of understanding to stop weapon smuggling to the Gaza Strip so as to boost efforts for a durable ceasefire.

Israeli Foreign Minister Tzipi Livni, who attended the signing ceremony, said "there must be an end of smuggling of weapons to Gaza." "The MOU we sign today is ... a vital component for the cessation of hostilities," he noted.

U.S. Secretary of State Condoleezza Rice, who blamed Hamas for sparking the three-week Israeli military offensive, said the deal aims to ensure that "Gaza can never again be used as a launch pad" for rocket and other attacks.

Flanked by Livni at the signing ceremony, Rice said the memorandum "provides a series of steps that the U.S. and Israel will take to stem the flow of weapons and explosives into Gaza."

Prior to the ceremony, State Department spokesman Sean McCormack said that the "the essential element of this (document) is to inhibit the ability of Hamas to rearm."

(Xinhua News Agency?January 17, 2009)