Egypt and Saudi Arabia have called for an immediate ceasefire in the Gaza Strip.
The state news agency SPA said President Hosni Mubarak and Saudi King Abdullah held talks in Riyadh on Tuesday and agreed that there must be "an immediate ceasefire" with "immediate and complete implementation" of a proposal by President Mubarak.
A summit meeting of the Arab League is to be held in Kuwait next week to discuss the crisis.
Both countries will attend the meeting.
Egypt blames Hamas for the Israeli assault on Gaza which began on 27 December after Hamas ended a ceasefire on 19 December.
However, Hamas says it has "substantial observations" to make on the Egyptian proposal.
Senior Hamas official Moussa Abu Marzouq told Al Jazeera television on Tuesday that any ceasefire proposal must address the group's demands for an Israeli withdrawal from the Gaza Strip and a complete opening of border crossings.
The Egyptian proposal calls for a temporary truce, followed by a long ceasefire and the opening of border crossings with the presence of the Palestinian Authority of President Mahmoud Abbas, whose forces were driven out of Gaza by Hamas in 2007.
The third phase deals with efforts to reconcile Hamas and Fatah.
Lebanese political sources close to Hamas reported on Monday that the movement would reject Egypt's proposals.
United Nations Secretary-General Ban Ki-moon demanded on Monday that Israel and Hamas stop fighting immediately.
Israeli ground forces entered Gaza on 3 January.
The Health Ministry in Gaza says the Palestinian death toll is now 971.
More "work ahead" - military
Meanwhile Israel's military chief, Lieutenant-General Gabi Ashkenazi, says there is still "work ahead" for the armed forces in Gaza.
He told a parliamentary committee on Tuesday Israeli aircraft have carried out more than 2300 strikes since the offensive began.
However, Prime Minister Ehud Olmert, Defence Minister Ehud Barak and Foreign Minister Tzipi Livni reportedly decided late on Monday against ordering troops in the next two or three days to engage in all-out urban warfare.
