Ceasefire talks hit stalemate as death toll climbs to 144

The bloody seven-day conflict in the Gaza Strip looked set to continue last night as a ceasefire deadline passed without an expected announcement by Egyptian officials.

"An agreement for calm has been reached. It will be declared at 9pm and go into effect at midnight," Hamas official Ayman Taha told Reuters from Cairo, where diplomatic efforts have been focused, but the deadline passed without an announcement.

There were hopes that pressure from US Secretary of State Hillary Clinton, who arrived late on Tuesday, might help seal the deal.

Israeli warplanes and artillery continued to pound the Gaza Strip while Hamas and its allies launched dozens of rockets into Israel yesterday as a team of international diplomats converged on Cairo and Jerusalem to press both sides into a truce.

The violence has claimed the lives of at least 139 Palestinians and five Israelis, and left nearly 1,000 injured.

Details emerging from the Egyptian-brokered plan suggested a two-year ceasefire guaranteed by a joint Egyptian-US-Israeli mechanism. Hamas wanted an immediate, unconditional truce and the opening of Gaza's borders. Israel insisted on a long-term agreement underwritten by international guarantors.

As darkness fell on the seventh day of violence, both sides appeared to be pressing hard right up to the possible cessation of hostilities.

Hamas launched repeated barrages of rockets, including for the second time an M-75 missile aimed at Jerusalem that nearly hit the Palestinian city of Bethlehem.

An 18-year-old Israeli soldier was reported to have been killed while a civilian was seriously injured when rockets struck a shop and an apartment building in Ashkelon, and a woman was hurt in a strike on a house in Rishon Le Zion, near Tel Aviv.

Israel dropped thousands of leaflets on northern Gaza instructing locals "for your own safety to evacuate your residences immediately and move towards central Gaza city" – an apparent prelude to an extended aerial or ground operation against rocket launchers in the area.

The Israeli army said it targeted "11 terrorist squads," 30 underground rocket launchers and a safe house containing weapons and ammunition. Other targets included the Islamic Bank and smuggling tunnels.

Meanwhile, a Who's Who of international diplomacy led by the UN Secretary-General, Ban Ki-moon, the US Secretary of State, Hillary Clinton, the German Foreign Minister, Guido Westerwelle, and the British Foreign Office minister, Alistair Burt, criss-crossed Israel while 11 foreign ministers from the Arab League and Turkey paid an unprecedented visit to Gaza.Israeli leaders insisted that nothing short of an enforceable armistice would end the fighting.

The Israeli Foreign Minister, Avigdor Lieberman, threatened "Operation Defensive Shield 2" in Gaza, referring to Israel's 2002 incursion into the West Bank.

"We are not looking for a ceasefire," said the Israeli Environment Minister, Gilad Erdan. "What we are trying to advance today is to achieve long-term quiet and security with international backing and guarantees. As long as that is not achieved, the operation will continue."

The day began with a barrage of rockets fired from Gaza, including 16 aimed at Beersheba at 8am. Nine were intercepted by the Iron Dome missile defence system and three of them hit a bus, car and house in the city.

The driver of the bus on Tuviyahu Boulevard instructed his passengers to take cover when the sirens wailed. The rocket landed right in front of him, shattering the bus windows and sending thousands of ball-bearings shooting in all directions. Yehiel Navon, a 22-year-old salesman, came out of his home find the windscreen and bodywork of his Hyundai Accent riddled with holes.

"When the siren sounded, I took cover in our safe room," Mr Navon told The Independent.

"There was a huge boom. I came out and saw the bus outside my house completely destroyed. My car was ruined, full of holes drilled by shrapnel and ball-bearings that ripped straight through the chassis. It's a miracle no one was seriously injured."

Lilian Peretz, a long-time Beersheba resident whose three sons have been called up to the reserves, said that if the armistice does take hold, and Israel is able to stop further rocket attacks without invading Gaza, it will be a huge political success for the Prime Minister, Benjamin Netanyahu, who faces re-election in January.

"We can't live this way with rockets falling on our heads. I don't want the army to go into Gaza. We'll just have more dead Israeli boys and more kidnapped soldiers. We don't want war, we just want quiet," said Ms Peretz.

"I don't like Netanyahu. I didn't vote for him and I urged other people not to vote for him. He doesn't care about the poor and the weak in Israeli society. But he's done this right."