Egypt's president Mohamed Morsi says there are some indications a ceasefire could be reached soon between Israel and Palestinians in the Gaza Strip.
But there are no outward signs from the Israeli government that it is preparing to wind back operations against Hamas militants.
Speaking after talks in Cairo with Turkish Prime Minister Recep Tayyip Erdogan, Mr Morsi raised the possibility of a ceasefire but says he has no firm guarantees.
Hamas leader Khaled Meshaal is also in the Egyptian capital for the talks, aimed at de-escalating the conflict reports the BBC.
But he warned Israel against launching a ground offensive into Gaza.
Israel has put 75,000 reservists on stand-by, with one government minister being quoted as saying a ground offensive could be launched into Gaza on Sunday if the rocket fire does not stop.
Mr Mursi said: "If a ground invasion takes place... this will have serious repercussions for the region. We will never accept this and neither will the free world."
The ABC reports that Arab League foreign ministers, also meeting in Cairo, have given their backing to Egypt's mediation efforts.
Israel has denied reports it's sent officials to Egypt for negotiations.
Interior Minister Eli Yishai was quoted by Israel's Haaretz newspaper as saying that the goal of the Pillar of Defence operation was "to send Gaza back to the Middle Ages. Only then will Israel be calm for 40 years".
Israeli government spokesman Mark Regev said Israel will hit Hamas' command and control, its arsenals and rocket launching sites.
"We will strike at those who have been firing rockets at our civilians."