World Bulletin/News Desk

Talks to end a month-long war between Israel and Palestinian fighters in Gaza have made no progress so far, an Israeli official said on Tuesday, as a 72-hour ceasefire in the shattered Palestinian enclave held for a second day.

Israeli and Palestinian negotiators were expected to reconvene later in the day in Cairo where Hamas and its allies are seeking an end to an Israeli and Egyptian blockade of the Gaza Strip.

"The gaps between the sides are big and there is no progress in the negotiations," said an Israeli official who declined to be named. There was no immediate comment from Hamas.

A Palestinian official with knowledge of the Cairo talks told Reuters, on condition of anonymity: "So far we can't say a breakthrough has been achieved ... Twenty-four hours and we shall see whether we have an agreement."

Hamas is demanding an end to Israeli and Egyptian blockades of the Gaza Strip and opening of a seaport in the enclave, a project Israel says should be dealt with only in any future talks on a permanent peace agreement with the Palestinians.

A month of war has killed 1,938 Palestinians and 67 Israelis while devastating wide tracts of densely populated Gaza. Egypt's Foreign Ministry has urged both sides to work towards "a comprehensive and lasting ceasefire agreement".

Gaza hospital officials have said the Palestinian death toll has been mainly civilian since the July 8 launch of Israel's military campaign to quell Gaza rocket fire.

Israel has lost 64 soldiers and three civilians, while heavy losses among civilians and the destruction of thousands of homes in Gaza have drawn international condemnation.

Hamas spokesman Sami Abu Zuhri said the new negotiations would be "the last chance" for an agreement. Israeli representatives are not meeting face-to-face with the Palestinian delegation because it includes Hamas.

In Geneva, the United Nations named an international commission of inquiry into possible human rights violations and war crimes by both sides during the offensive. The commission, which will be headed by William Schabas, a Canadian professor of international law, was welcomed by Hamas but condemned by Israel.

"Hamas welcomes the decision to form an investigation committee into the war crimes committed by the occupation (Israel) against Gaza and it urges that it begin work as soon as possible," spokesman Sami Abu Zuhri said in Gaza.

Israel's foreign ministry recalled that Israeli Prime Minister Benjamin Netanyahu had previously called the Human Rights Council a "kangaroo court".

"Already, with the decision on July 23 to establish the committee, the prime minister and the foreign minister declared that the Human Rights Council had long ago turned into the 'terrorist rights council' and a kangaroo court, whose 'investigations' are pre-determined," Foreign Ministry spokesman Yigal Palmor said in a statement.

LONG-TERM TRUCE

Israeli Strategic Affairs Minister Yuval Steinitz said in a radio interview on Monday that disarming Gaza fighters was crucial to a long-term truce and he hoped this could be done by diplomacy rather than force.

"I certainly hope that there will be a diplomatic solution. If there will not be a diplomatic solution, I am convinced that sooner or later we will have to opt for a military solution of taking temporary control of Gaza to demilitarise it again," he told Israel Radio.

Another sticking point in the Cairo talks has been Israel's demand for guarantees that Hamas would not use any reconstruction supplies sent to Gaza to build tunnels of the sort Palestinian fighters have used to infiltrate Israel.

Hamas has demanded an end to the economically stifling blockade of the enclave imposed by both Israel and Egypt. Israel has resisted easing access to Gaza.

According to the United Nations, at least 425,000 displaced people in the Gaza Strip are in emergency shelters or staying with host families. Nearly 12,000 homes have been destroyed or severely damaged by Israeli attacks.

In Gaza, shops began to open and traffic was normal as some displaced families returned to the homes they had been forced to abandon during Israeli attacks, expressing hopes that this truce would last after a series of failed ceasefires.

"God knows if it is permanent," said Abu Salama, a resident of Gaza's Shejaia district, as he and his family headed home on a donkey cart. "A truce, no truce, it is becoming like Tom and Jerry. We want a solution," he said. 

TURKISH SHIPS

The new three-day ceasefire won praise from United Nations Secretary General Ban Ki-moon, who hoped it might lead to a durable ceasefire.

Israeli air strikes and shelling on Sunday killed nine Palestinians in Gaza, medics said, in a third day of renewed fighting since the last truce ended.

One air strike destroyed the home of Gaza City's mayor, Nezar Hijazi, across the street from the Reuters bureau where reporters and cameramen took cover as the explosion occurred. There were no casualties in the attack because Israel telephoned warnings to residents in the house and neighbouring buildings.

Since the previous ceasefire expired, Palestinian rocket and mortar salvoes have focused on Israeli towns and communities near the Gaza frontier in what seemed a strategy of sapping morale without triggering another ground invasion of Gaza.

Residents of those communities, who had been assured by the military they could return home when last week's truce began, have accused Israeli authorities of misleading them.

Israeli tanks and infantry left the enclave last Tuesday after the army said it had completed its main mission of destroying more than 30 tunnels dug by militants for cross-border attacks.

Four wounded Palestinians were flown to Ankara for medical treatment on Monday, the first sign of Turkey's promised plan to evacuate thousands from the Gaza Strip.

A Turkish aid group said it would send ships again to challenge the Israeli blockade of Gaza, four years after Israeli commandos stormed its flotilla bound for the Palestinian territory and killed 10 people in fighting with activists on board.