Both Hamas and Israel say preparing for 'long battle, as three-day truce nears end.

Prime Minister Binyamin Netanyahu cancelled a security-cabinet that was scheduled for Tuesday after it became apparent that there had been no progress in the Cairo talks on Monday, and there was no need for any decisions to be taken. Rather than hold the security cabinet meeting, Netanyahu briefed the heads of his coalition partners in the afternoon.  One diplomatic official said that Israel hoped that the cease-fire would be extended, but that Hamas was the “wild card” and it was not clear how they would react.

Israel has also agreed to drop its opposition to the transfer of funds to pay salaries of Hamas civil servants in the Gaza Strip and expanding the fishing zone gradually, the sources said.  In addition, the sources added, the Israelis and Palestinians have agreed on the reopening of the Rafah border crossing and the deployment of 1000 Palestinian Authority police officers at the terminal, as well as the release of the fourth patch of Palestinian prisoners, who were supposed to be freed earlier this year in accordance with a US-sponsored agreement between the PA and Israel.

Diplomatic officials said that all the options were on the table, and that three scenarios were being taken into consideration: that a longer-term cease fire is agreed upon by midnight; that another 72-hour cease-fire is declared during which negotiations continue on a longer deal; that the cease-fire ends and Hamas again begins rocketing Israeli towns.  The Palestinians, meanwhile, said that almost no progress has been achieved during the Egyptian-sponsored talks. Unconfirmed reports suggested that Hamas and Islamic Jihad members of the Palestinian negotiating team were considering pulling out from the talks in protest against Israel’s refusal to accept their demands.

Palestinian sources told the Palestinian Ma’an news agency that Israel was insisting on discussing the fate of two missing IDF soldiers who were killed during Operation protective Edge, while the Palestinians asked to delay this issue.  According to the sources, Israel has thus far accepted only a few of the Palestinian demands, including increasing the number of trucks loaded with food and goods that enter through Kerem Shalom and Nahal Oz and allowing 5000 Palestinians from the Gaza Strip to enter Israel every month.