Israel is taking seriously an international proposal for a Gaza ceasefire that would involve a pledge of foreign forces to prevent Hamas from rearming, Israeli officials and diplomats said on Tuesday.
French President Nicolas Sarkozy said a deal to end Israel's offensive in Gaza was "not far" away, but gave no details.
"I'm convinced that there are solutions. We are not far from that. What is needed is simply for one of the players to start for things to go in the right direction," he told reporters during a visit to French UN peacekeepers in south Lebanon.
Middle East envoy Tony Blair said major powers agreed on the need for security measures on Gaza's border with Egypt - which Israel calls the Philadelphi Route - to stop the arms flow.
"What is being talked about is a credible plan to stop the smuggling," Blair told a small group of reporters in Jerusalem.
Israel has ruled out halting its 11-day-old offensive against Hamas without international guarantees that smuggling tunnels will be found, destroyed and not rebuilt.
Hamas demands an end to a crippling economic blockade of the Gaza Strip imposed by Israel, with effective Egyptian help.
International pressure for a ceasefire seemed likely to mount after Palestinian medics blamed Israeli tank fire for killing up to 40 people at a United Nations school on Tuesday.
If confirmed, the toll would make it by far the deadliest Israeli strike since the fighting began, and among the bloodiest Israeli actions in the Palestinian territories in decades.
Altogether at least 629 Palestinians have been killed and more than 2,700 wounded since Israel launched its assault on December 27 with the declared aim of ending Hamas rocket fire on southern towns. Nine Israelis have been killed in the conflict.
So far Israel has shrugged off international calls for a ceasefire because of the diplomatic support it has received from the United States, its closest ally.
State Department spokesman Sean McCormack on Tuesday reiterated that the condition for an immediate ceasefire was that it should be "durable, sustainable and not time-limited".
Sarkozy said he was returning to Sharm el-Sheikh to meet Egyptian President Hosni Mubarak to discuss a possible deal.
'End the smuggling'
Prime Minister Ehud Olmert restated his country's terms in the town of Sderot, often targeted by Hamas rockets.
"The result of this operation must be, first and foremost, the end of smuggling of ammunition via the Philadelphi corridor into Gaza, in order to prevent murderous organisations from being able to fire," he said on Israel radio.
Olmert's spokesman, Mark Regev, said the prime minister had delivered a similar message in talks with Sarkozy on Monday.
"Preventing a Hamas arms build-up is the necessary foundation of any new calm arrangement," Regev said, adding that Hamas used the previous six-month ceasefire brokered by Egypt to double the range of its rockets from 20 km to 40 km (13 to 25 miles).
"Under no circumstances will we agree to a new calm that will allow them (Hamas) to increase their range to 60 km so we have rockets falling on the outskirts of Tel Aviv," Regev said.
Blair said Sarkozy, the European Union and the United States all agreed that new anti-smuggling measures would be needed to clinch a ceasefire, but gave no details on what these might be.
Sarkozy with UNIFIL forces in Lebanon (Photo: Reuters)
European diplomats said they were discussing sending a special force, including military engineers, to the border with equipment to work with Egypt to combat the tunnels. A naval contingent was also under discussion, one senior diplomat said.
Asked whether a ceasefire would be possible without an international commitment to stop the smuggling, Blair said: "I think it is very difficult unless there is a significant advance for the Israelis on security, which allows a significant advance in opening up Gaza to the outside world."
The tunnels are also used to trade food and other goods to ease a tight Israeli economic blockade of the Gaza Strip which has helped make life miserable for its 1.5 million people.
Israeli officials said ceasefire talks were picking up pace.
One senior official said Sarkozy had presented Israel with a "serious initiative", in partnership with Egypt, for a ceasefire, with discussions focused on the size and equipment of an "international presence" on the Egyptian-Gaza border.
A senior European diplomat said Egypt and the Palestinian Authority could request international help and the forces could deploy on both sides of the border. The Egyptians could talk to Hamas to win its consent for the deployment on the Gaza side.
US seeks immediate ceasefire with conditions
The US State Department said on Tuesday it wanted "an immediate ceasefire" in Gaza but US officials quickly stressed they would not budge from their stance that it must be durable, sustainable and indefinite.
The comment by State Department spokesman Sean McCormack and the decision to send Secretary of State Condoleezza Rice to the United Nations on Tuesday to discuss a ceasefire initially appeared to signal flexibility in the US stance.
The United States had previously steered away from the "immediate ceasefire" language embraced by many of its European and Arab allies, who are gathering for a UN Security Council meeting on how to end Israel's 11-day-old offensive in Gaza.
"We would like an immediate ceasefire, absolutely," McCormack told reporters. "An immediate ceasefire that is durable, sustainable and not time-limited."
White House spokeswoman Dana Perino immediately denied the United States, which has consistently defended Israel's right to have attacked Gaza to end Palestinian rocket attacks on Israeli civilians, was shifting its position.
"I don't think that calling for, that the word 'immediate,' actually signals anything different than what we said yesterday," she told reporters. "We want to get to a durable and lasting ceasefire as soon as possible and, if that is immediate, then we would certainly welcome that."
Other US officials said Rice's UN trip should not be seen as a sign of US flexibility, with one saying it "is to signal that we are making every possible diplomatic effort to try to bring about a ceasefire on the terms that we have outlined."
The United States has said it would not support any ceasefire that had a specific time frame. In comments on Tuesday, McCormack and other US officials stopped well short of calling on Israel to end its offensive.
Barack Obama, who takes over as US president from George W. Bush on January 20, broke his silence about the violence on Tuesday, saying the loss of civilian lives in Gaza and in Israel was a "source of deep concern for me."
Obama added he would adhere to his principle that only Bush should be the voice of US foreign policy at this time but he would have plenty to say after his inauguration in two weeks.
The Bush administration has said its efforts focus on stopping rocket fire into Israel, ending the smuggling of arms into Gaza through tunnels from Egypt and reopening border crossings to permit goods to flow into the coastal strip.
"There isn't a whole lot of flexibility here," said one US official who spoke on condition that he not be identified. "It's going to be hard for us to support anything that doesn't deal with those three elements."
US officials said Rice's trip to the United Nations was in part designed to blunt possible accusations that the United States was indifferent to the suffering of Gazans had she stayed away.
They said it was unlikely a Security Council resolution would emerge from Tuesday's meeting.
From their point of view, the US officials said, the main action would be in Rice's meetings with Arab and European foreign ministers on stopping the rocket fire, ending smuggling and possibly opening border crossings.