Israel close to agreeing ceasefire over Gaza offensive, Egypt says

Egypt, which has been leading efforts to secure a Gaza truce after nearly a week of cross-border violence, said yesterday the Israeli "aggression" would end in hours, but the bloodshed showed no signs of abating.

Soon after Egypt's President Mohammed Mursi predicted Egyptian-mediated efforts would imminently produce "positive results," Israeli Prime Minister Benjamin Netanyahu told Gaza's Hamas rulers to choose between peace and "the sword," as air strikes rocked Gaza City and a rocket exploded near Jerusalem.

The rocket crashed into an olive grove near Jabba village, in an attack claimed by the armed wing of Gaza's ruling Hamas group, the second such attempt to hit Jerusalem in five days.

Nobody was hurt, but the sirens sparked panic in the Jerusalem, with cars screeching to a halt and people dashing for cover.

In Gaza City, Israeli warplanes dropped leaflets urging people to evacuate their homes amid fears of an imminent ground invasion, and a new strike killed at least six people in Sabra neighbourhood, Hamas's health ministry said.

It came as Israel and Hamas mulled an Egyptian-mediated ceasefire on the seventh day of the Jewish state's bombing campaign against rocket-firing militants in the enclave.

In Cairo, Mursi struck an upbeat note, saying Israel's "aggression" would soon end.