Israeli Prime Minister Benjamin Netanyahu was convening his war cabinet later on Sunday, a senior official told AFP, amid intense diplomacy to forge a Gaza truce and hostage release deal.
In Brussels, the European Union's foreign policy chief Josep Borrell told journalists before meeting the Palestinian premier that a strong Palestinian Authority (PA) was in Israel's interest.
EU members Ireland and Spain, and also Norway, have said they will recognise the State of Palestine from Tuesday, drawing furious Israeli condemnation.
"A functional Palestinian Authority is in Israel's interest too, because in order to make peace, we need a strong Palestinian Authority, not a weaker one," Borrell said.
Palestinian prime minister Mohammed Mustafa, whose government is based in the occupied West Bank, said the "first priority" was to support people in Gaza, especially through a ceasefire, and then "rebuilding the institutions of the Palestinian Authority" there after Hamas seized it from the PA in 2007.
Meanwhile deadly fighting rocked the Gaza Strip and Hamas militants fired a salvo of rockets at Israel's commercial hub Tel Aviv, sending people scrambling for shelter.
US President Joe Biden has pushed for renewed international efforts to halt the war, now in its eighth month.
An Israeli senior official, speaking on condition of anonymity, told AFP that "the war cabinet is expected to meet in Jerusalem tonight at 9 pm (1800 GMT) to discuss a hostage release deal".
While Israel's main focus is to free the remaining hostages, Hamas has insisted on a permanent end to the fighting -- a demand Netanyahu has rejected.
The official had said Saturday that "there is an intention to renew these talks this week" after negotiations involving US, Qatari and Egyptian mediators stalled in early May.
A member of Hamas's political leadership, Izzat al-Rishq, said Sunday that so far, "we have not received anything from the mediators".
He insisted on the Palestinian group's long-standing demand for a permanent cessation of hostilities as "the foundation and the starting point for anything".
Rishq accused Netanyahu of "trying to buy more time to continue the aggression".
Shortly afterwards, Hamas's armed wing said it had targeted Tel Aviv "with a large rocket barrage in response to the Zionist (Israeli) massacres against civilians".
Israel's army said at least eight rockets were fired from Gaza's far-southern city of Rafah and that "a number of the projectiles were intercepted", with no reports of casualties.
- 'Constant bombardment' -
Netanyahu has vowed to destroy Hamas to prevent any repeat of the kind of attack the Palestinian Islamist group launched on October 7, but has also faced growing domestic and international criticism.
The attack on southern Israel that triggered the war resulted in the deaths of more than 1,170 people, mostly civilians, according to an AFP tally based on Israeli official figures.
Militants also took 252 hostages, 121 of whom remain in Gaza, including 37 the army says are dead.
Israel's retaliatory offensive has killed at least 35,984 people in Gaza, mostly civilians, according to the Hamas-run territory's health ministry.
As the war ground on, the families of hostages still held by Palestinians militants have piled pressure on Netanyahu to secure a deal to free them.
Washington has also taken a tougher line with its close ally as outrage over the war and US support for Israel has become a major issue for Biden, seeking in re-election in a battle against Donald Trump.
With more strikes reported Sunday across Gaza, Israel's military said that over the past 24 hours it had destroyed "over 50 terror targets".
Fighting has centred on Rafah, where Israel launched a ground operation in early May despite widespread opposition over concerns for civilians sheltering there.
Rafah resident Moaz Abu Taha, 29, told AFP of "constant bombardment from land and air, which has destroyed many houses".
Gaza's civil defence agency said it had retrieved six bodies after a house was targeted in eastern Rafah.
The army said militants who "attempted to attack" troops in the Rafah area had been "eliminated".
- Global outcry -
The UN has warned of looming famine in the besieged territory, where most hospitals are no longer functioning.
Israel's military said Sunday the arrival of aid had been stepped up, both via a new US-built pier and through its own land crossings, Kerem Shalom and Erez West.
Aid trucks from Egypt began entering Gaza through Kerem Shalom crossing on Sunday, state-linked media Al-Qahera News reported, after Cairo has refused to coordinate aid through Rafah as long as Israeli troops control the Palestinian side of the crossing.
Amid the bloodiest ever Gaza war, Israel has faced growing global outcry over the surging civilian death toll, and landmark moves last week at two international courts.
Last Monday, the prosecutor at the International Criminal Court announced he was seeking arrest warrants against Netanyahu and his defence minister as well as against three top Hamas figures.
And on Friday, the International Court of Justice ordered Israel to halt its Rafah offensive or any other operation there that could bring about "the physical destruction" of the Palestinians.
In central Gaza's Deir al-Balah, an AFP photographer said Palestinians were washing their dirty clothes and dishes in the sea.
"Since the war began, we have been suffering from a lack of water," said displaced man Anas Helles, adding that bottled water had become expensive.
"We use it even though it may be polluted or unsafe, but there is no alternative to sea water," said another man, Ahmed Helles.
"We buy water, but we have no money left."